The judgement of whether conversion to DSD is OK needs to be made in the eyes of buyers, not those of us who are not customers. And many of those people cannot stand digital anything. Logic of it being a better format doesn't work with them. So why should it make sense in this context?
Had a QA manager working for me years ago at Sony. He brought his wife to a trip we made in Germany. She is vegetarian. They go to a restaurant and she gets soup which she believes to be devoid of meat. While eating the soup, she senses what could be meat. She proceeds to spit it out! Waiter goes and gets the Chef who had become quite angry of someone spitting out his soup! To me as a non-vegetarian, a bit of meat would be of no concern but clearly to her, was a huge deal to make a scene that way.
Another closer analogy. A high-end wealthy audio guy was remodeling his house and posted pictures of the audio room. I raised a concern that he had made no accommodation for an Ethernet jack. You should have seen him blow my head off saying that the day digital comes close to his system, is they day he will kill himself or some such thing! I responded that one day that may change and that if he loves music, he better be into networked audio. He said no way. Fast forward a few years and now he used subscription digital music!!! But we digress.
The point is that these guys are super religious about about their analog audio and LP. They pay huge premium to preserve and use that format. To have one of the icons of their world using digital all this time is just untenable. In that regard, MoFi abused the trust their customers put in them. It matters not whether the results are better, etc. It simply is not what they were selling.