Beerman, you asked!
Ahhh, digital recording and the hows/whys it is what it is and Redbook and so on. To shorten the world history, the first digital recordings were done in the early 1940's as a way Roosevelt in the US and Churchill in England could communicate without the Germans breaking the code. Yep, the first digital recordings were for the spoken word and a colaboration between the US and England. Cost? I dunno, but very interesting. In the early 1960's, the US Air Force wanted an optical disc to store computer data--cold war thing. They paid big bucks to the American company, Magnavox to develop the optical disc--then stopped after a few years (cold war thing) Eventually, Magnavox got bought out by Philips in the Netherlands that liked the idea of an optical disc to hold digital recordings for (amazingly) music storage!
Their major problem was the digital to analog convertor so they hopped in bed with Sony (Japan) as they were more advanced with that sort of thing. They had to solve what bit depth was "perfect" for human hearing and how long the CD should be--how much did it need to store. The storage capacity was simple, 74 minutes because the CEO of Sony wanted to hear Beethoven's 9th without interuption--how dat for a powerful CEO?
Have no idea how many millions was spent to figure out human hearing, research about sound perception etc. but it was not cheap! The Sony CEO got what he asked for, after all--he wanted to listen to music on plane flights on cassette and told the engineers to build him a small cassette deck that ran on batteries so HE could tune out other passengers. They did as asked (at a rather large expense) and the CEO was happy. Hmmmm, I wonder if other people would want such a small battery operated cassette deck that you listen with headphones--already paid for the R&D sooo.... the idea of the Walkman came AFTER they built the thing for one guy!
The rest they say is history--Sony at the time was the leading edge and they either had a wild success (CD, Walkman, Trinitron tubes, Playstation) or staggering failures (Beta, MiniDisc, DAT, 8mm) Can't win them all--It is very interesting to see where the tech came from though...but think about it.
Did the original researchers get 16 bit "wrong"? They were not driven by marketing or new and improved--they wanted to know what the truth was right at the start. The other thing to ask yourself is has human hearing become "better" over the past 30 to 40 years? Has the acoustics of a typical room in a house become quieter, required less acoustic treatment than older homes and have humans that purchase such things now show better hearing ability? Our medical pals will laugh at you if you think that human hearing has evolved or improved so that is out. Sure, you can do 16, 24, 32 or 64 bit--you can keep "improving" data rates to insane levels (I believe the SNR for 32 bit is 144dB) The bit rates exceeds the abilities of even modern electronics to stay that low--what is the max? What is the minimum performance that human hearing can detect? At what point does the source exceed the rest of the system to reproduce the signal? To answer that is easy, the highest distortion generated is the speakers, since the room creates a mess--that inaccuracy is distortion, your room creates distortion from what signal is attempted to play. It can also be caused by incorrect setup, poor toe-in (if required) and all sorts of problems.
Be aware the profits from CD was staggering--a dream for the music companies as people replaced their records, 8 tracks and cassettes with CDs. Good times! However, by 1990, music sales softened, audio equpment sales started to drop and the boom was over. Basically, the people that wanted/needed CD already had one--or two. Time for CD in the car, CD in the boombox, portable CD players and so on--but CD sales were softening as that boom was over. The music companies TRIED to create new formats, MiniDisc was one of them as a great format for mobile audio and you could record on it! Sony, since they bought out a music company created the push but CD for the most part was all people needed. The computer industry created CD-R then MP3 and the rest we know is history.
The CD for the music companies was a blessing at the beginning which became a curse--it don't wear out if you don't physically damage the thing. Then transfer it bit perfect to computers, put them on MP3 players or downloads--the curse arose. The music companies must "obsolete" the CD, the world moved on and they can choose whatever works for their file needs--be it CD, download, streaming or whatever. The attempt to "obsolete" the CD did not work very well as downloads took off. Now they need to "obsolete" 16 bit--with 24 bit or 32 bit or whatever "high rez" format they wish to push. After all, all those original research and development people were wrong and our new gizmo (SACD, 24/32 bit, MQA or whatever) is the "truth". How is that working for you? Hmmmm... I'm not saying music companies are in it for the money, it is all about the art...
To test it is rather simple, compare the waveforms between CD or whatever then ask "Does it matter?" Sure, a person could always push to get more zeroes, get higher rates or more power but does it matter? Well, the "does it matter" part is also know, many decades of testing about what numbers matter and what does not. Luckily, human hearing has not evolved at a drastic rate although we wish it did. Does 24 bit sound better than 16 bit? All those questions have been tested many times because there is MONEY in the answer! After all, if something could be improved that is noticeable then big bucks are to be made--it is the 1980's all over again! Buy--buy--buy! Alas, that has shown not to be the case and the money has shifted to other things like TV screens, computers, cell phones and the like. Looking at audio sales, consumer speaker sales fell in 2019 by 12 percent--double digit drops so I don't see a big audio surge anytime in the future. The only consumer growth in speaker sales was in China, they are the growth market so the shift continues.
As far as CDs, CD players, DACs and the like--those have been tested over the years. The first link is for Tom over at Tom's Hardware Guide. He is a PhD in computer CPU design and he was the guy that figured out Intel muffed the first Pentium back in the 90's in reguards to math processing accuracy--yeah, THAT guy. You could say he is a pretty smart cookie and he noted a bunch of chatter about DACs sucking up precious bandwidth on his forums. Normally, his forums are computer specific and he wanted to answer the question once and for all. You can tell he is the "sciencey" type as he used testers that had their hearing tested/verified, used some serious equipment and BENCH TESTED the DACs before he tested them on humans. Yeah, he found issues that were measureable with the chips on the bench--but could humans hear the difference? Yep, he purchased a 2,000 dollar DAC himself--he wanted to see if it mattered. He also purchased a few sound cards, even ran a motherboard that had built-in sound and threw that in the test also. Granted, he would not test this himself because his hearing was not as good as the testers, he was around 45 or 50 years old at the time--young man's game. Here is his test results, enjoy all the charts/graphs that he generated.
Another test was done with over 30 audiophile type folks--they have a club. They took the "best" CD transport, DAC, amp and interconnects (including power cord!) put it on audiophile furniture and compared it against a very inexpensive studio amp, cheapest DVD player they could pick up at the big box joint, used interconnects they bought from a gas station and threw that mess on a folding chair. Both of the systems drove the same speakers and were switched physically by hand so the audiophiles could not blame the switch. They blew a weekend, tabulated the results and left who won or whatever to you. Yep, you have to figure out the results for yourself.
Sure, if you don't like the statistics you could claim the speakers didn't "resolve" enough although getting over 30 people to agree on anything is world class! Maybe their speaker wires, amps, audiophile bricks, cable hangers or magic pebbles taped to the interconnects would of mattered. Personally, I know who ATC is and have heard them in a studio... accuracy is what they do. No, they didn't test all speakers with all amps, all wires and every conceivable situtation but they did blow a weekend.
Personally, I don't understand why people will blame everything on performance for the money they spend. Seriously! I like audio equipment that is built a certain way, looks a specific way and some of it (for me anyway) looks "cool". My wife thinks (knows!) I'm an idiot but boys and their toys. I have amplifiers that has more power capability than I can use, speakers that can generate far, far higher SPLs than I can stand and my subs are more powerful than my drywall. (oops!) I am about to build some surrounds that have output capability far higher than I can use (117 to 119dB) for surrounds
Never know, in a few years we might move and I'll have a huge basement I "need" to provide reference SPL so I "need" beastly surrounds! It can happen!
In reality, since I have to build the things--might as well go overkill, absolute overkill so no matter what happens I won't be doing that again! I can go into denial and claim that surrounds so powerful generate less distortion--very true but in reality, I am going overkill with surrounds. I am doing that because I want to, part of the hobby but I won't justify myself with claiming I'll get a drastic difference or even a difference at all if I used smaller/less costly surrounds.
I don't care what people blow their money on--hobbies tend to do that. Cars and boats are famous money pits, audio is the same for some people. Some people that are 60 pounds overweight will spend monster money on car parts to save 10 pounds of weight--for performance. Uhhhhh.... ya know, removing weight from the driver's seat does the same thing...
My brother had a boat, good times but he kept track of cost VS actual time and realized chasing hookers would of been a cheaper hobby with no dock fees.
I have a very expensive bicycle (recumbent type) but I evaluate anything I'm about to purchase, to "check myself before I wreck myself". Since I am in no way ever going to set a world record, that reality dictates what tires, brakes, shifters, gearing and whatever I can blow money on for the rig... besides, you can't ride a recumbent in the Tour De France even if I could (and I can't!) I have seen 70 year old men on bicycles using the very delicate racing parts--to save an ounce or two. Uhhhh, such are hobbies but I do find it rather odd to see old guys racing like it mattered and their lycra shows the real place they need to "lose weight".
As my wife states, "Boys and their toys"... pretty much, she does have more shoes than I do and what does she need with four purses?
Granted, I own more speakers than she has purses so... hmmm. At least she does not claim one purse has higher performance than the other or her golden wallet fits in her dumpsterphile purse better. She liked the purse, thought it was cool looking and bought it. Me? I can spew out charts, graphs, statistics, SPL and enough audio jibber-jabber to put my wife to sleep, I learned that is a waste of time. Basically "It will work better" works but it had better work better that SHE can hear! For this reason, when I make a change it is a real change and so far... she has acknowledged it has done something. Oddly enough, she does like subwoofers although she won't admit it--she does not have a poker face and sub bass makes her grin.
In summation, we all have our toys and yes--I'll be the first to admit I blew money on audio kay-rap that did not improve performance. However, the main thing is to know the difference. As in all hobbies of mine over the years, the first thing you should do is educate yourself on what matters, what does not and to become knowledgeable enough to tell the difference. Works with audio, cars, boats, bicycles, motorcycles, camera/video equipment, computers, cell phones and all sorts of things not required to survive life. Throwing money at a problem eventually will lead to you running out of money and still having the problem. Well, unless you are the government that is...
At the end of the day, it is just a hobby and in the greater scheme of things in life--purses and shoes are higher priority in the real world so relax, kick back and enjoy this goofy hobby.