I have spent quite a lot of time on this issue, and while I do not consider myself an expert, and of course welcome the insights of others, I would like to respond to this post by @Urbanluthier:
DSD256:
(a) There is now, within my musical taste, a substantial number of titles recorded natively in DSD256;
(b) These recordings are mostly made using the Pyramix Workstation, a product of Merging Technologies;
(c) Merging Technologies also developed the DXD format (352.8kHz / 24bit);
(d) The DXD format was created specifically to be able to convert DSD256 to DXD for edting. This is because, as is well-known, the DSD format consists only of 0s and 1s to designate a decrease or increase, respectively, of signal amplitude;
(e) Once the DSD256 file, or a portion of the file, is edited in DXD, the file can be saved back to DSD256;
(f) It is my understanding that the DSD256-to-DXD-to-DSD256 conversion is lossless (minus, of course, what was edited by the sound engineer);
(g) Many of the DSD256 albums that are edited in DXD are not available for download in DXD, but only in lower resolutions, e.g., PCM 192kHz, reflecting a Decrease in resolution relative to DSD256 (and also, relative to DXD)
It is true that NativeDSD upsamples some original DSD128 recordings to DSD256, DSD512, and (very rarely) DSD1024. However, this is clearly marked and one can simply choose, as I and others do, to purchase the original DSD128 format. As you rightly state, it is better to upsample within the dCS platform, if one chooses to do so.
No. Because this would not enable native DSD256 playback, which is the desired/request feature of some members of the community.
Again, respectully no. This is because the DSD256 recording is often not made available in DXD format. If every DSD256 release were offered in DXD, and, as is believed, that conversion process is lossless, then one could rightly question the value of having DSD256 playback.
First, if I have any of the above factually incorrect, of course please advise. I am not in the recording/mixing profession.
Second, I personally would value a simple statement from dCS clarifying the matter, i.e., current generation hardware cannot be easily upgraded to play DSD256. This would save the hassle of this on-going debate, and the (seemingly neverending) wait on this feature request. It would be better if we simply knew this was not coming. (@James)
My best,
R