Best preamp is no preamp: always true?

The appropriate preamp is system-dependent. Preamps can be viewed as a combination of a passive attenuator and a gain stage. The issues that need to be addressed are: Are output and input impedances compatible; Is there enough gain or excessive gain in the overall system; Is the built-in "preamp" output of the CDP of good quality or is it advantageous to take a direct out (bypassing the built-in if possible) and use a better quality preamp stage?

I have found that in real life passive pre's can sound very thin and bad. I'm sure it's system dependent, but if the impedances don't match well, it will sound bad.

Sogood51, your statement doesn't say very much.
"Passive volume controls are better than all but the best active preamps. Passive volume controls do not work well in all systems"
It is like saying French bordeaux is the best red wine out there but it is not for everyone.
How is that better than all and yet it is not competetant in some system?
Would it make sense to say that best active is better than all passive because it is suitable for all systems?

in my opinion, regardless whether the linestage and volume control are in the CD player or preamp, the quality of these parts are key. if a dedicated preamp has a better linestage and volume control than those in the CD player, the system will most likely sound better with it.

Not at all always true. It really depends on the driver stage of the source, which is often a cheap OP amp. Furthermore, volume controls on CDP are often in the digital spectrum, which means that when you lower the volume from full, you are affecting (lowering) the sampling rate of the digital signal.
There are sources out there that have real analog volume control and exellent driver stages... where a good pre-amp might just get in the way of the music, but I think it is more the exception than the rule.