When you use a digital volume control, you are basically using a DSP to alter the audio data...reducing values as you lower the volume. Imagine plotting the original data on a 100x100 grid...that is what your "best resolution" is. Now imagine reducing the grid to 60x60, altering the data values proportionally (to the nearest integer), and plotting them again. You'll see that the data plot on the smaller grid is a less-than-exact portrayal of the original data plot. This is exactly what is happening to your data when you use a digital volume control.
In the case of Wadia (and some other companies), they use a huge upsample/oversample to increase the "resolution" before implementing the digital volume control to help maintain some of the accuracy in the digital volume control. Imagine that same 100x100 grid blown up to 1000x1000. You can still draw the waveform with the same accuracy that you did at 100x100, but when you now reduce the grid by 40% to 600x600, it is still relatively similar to the 100x100 grid.
An analog volume control basically attenuates an analog signal. So while the volume gets softer, it is not limited by digital resolution, so you maintain accuracy of the original analog waveform. That said, if a poor volume control is used, you then add distortion to the waveform.
I don't know what the Panasonics do, but if they implement a digital volume control, they have the same issues.