I'll respond, mmakshak.
I was just finishing a long, detailed and closely reasoned response to you which took me a full 1/2 hour to compose when I made the mistake of going to the previous page to check the wording in your post, forgetting that you can just scroll down, and in the process lost the whole damned thing. This has happened once or twice before and it drives me nuts!
Anyway the gist of it was this notion dates from an era (turntables, pre CD) when the source was highly variable in quality, particularly in that arcane aspect of subliminal-but-not-inconsequential time errors of the "wow and flutter" variety. At that time the argument could be said to make some sense. CDs changed all that. Now the differences at the source end are much more subtle.
Now, I believe that by far the most important variable in most systems is the speaker/room aspect. With a high degree of accuracy at that end of the system, more meaningful choices can be made upsteam in that they can now be heard!
So I say research carefully and start with the best speakers you can('t) afford, position them properly, treat the room appropriately and work upstream. Amps next, so you can judge preamps, and source last. Then you will go further upstream for choices of recordings.
I also think that the same rules apply further upstream, possibly including microphones. For example, the quality of the talent of the mixing engineer is more important than the actual equipment used - the board, the mic preamps - even the microphones. I have heard great results, for example, on stand up bass where a Shure SM 57 (the one you can hammer nails with) was used. The "trickle up" theory ends with the mics, though. In the end there is no substitute for good music and good musical talent.
That's my thinking and I'm currently putting my money where my mouth is!
Russell