The use of outboard DACs is quite common in many audiophile circles and also is a complete waste of money, due to there being no improvement in sound in most instances. From an audio engineering perspective we concurred all the problems with DACs decades ago.
There can be specific scenarios where connecting from one device to another via an optical connection can kill ground loop noise, but the improvement one might hear isn't because "the external DAC sounds better than the internal DAC". You also can't assume everyone has audible ground loop noise so one should plan on using an outboard DAC automatically. The numerous forums and reviewers which claim otherwise, and insist DACs have audible differences, never conduct their DAC tests under controlled conditions where the two devices are carefully calibrated, using external measurement gear, to provide matching volume levels within .1 dB or closer, for device A and B, nor are their tests conducted using blind testing protocols to preclude expectation bias. They expect that expensive, outboard DACs should
sound better so when they hook them up and listen, guess what happens? They indeed report improved sound, yet mysteriously this improvement disappears under double blind conditions, with matched volume levels, using the exact same gear! [DACs may all claim to have the same output level, say 2V, but tests show that isn't always true and ones that play ever so slightly louder, say by half a dB or even less, are often mistakenly thought to sound better yet the only true
difference was level! Add a tiny cheap amp to boost the weak one's output, or attenuate the louder one, and suddenly the two are indistinguishable from each other under double blind conditions.]
There also can be some computers, media servers, and other devices where the designers crammed things in so tightly that the audio out amps pick up extraneous RF/EMI noise they ideally shouldn't, hence passing the digital signal along to a different convertor several feet away from the noise source will solve that problem, however one shouldn't assume their device necessarily has such a problem without trying it out first, nor is the improvement by using the external DAC because of the DAC chip itself. Also keep in mind noise can come from many different sources and nothing is completely noise free if you crank the volume up enough.
There also have been poorly designed DACs which either muck up the sound either due to incompetence or purposefully to gimmick the sound so it is distinguishable, but audibly "perfect" DACs can be had for very little money (and often just the existing one built in will do just fine). A common example is the $29 Behringer UCA202, although one should stay away from its headphone out jack and stick to the RCAs only, because the headphone amp inside has an output impedance which might not mesh well with low impedance headphones. http://nwavguy.blogspot.com/2011/02/...02-review.html
P. S. Generally optical outs are at a fixed volume level and can't be varied, via remote or other wise, although there have been some exceptions.