Imagery has always been important to me with HiFi. With a real live performance if one closes one's eyes, there isn't the sort of sharp imaging we get with HiFi as mostly, we're sitting in a diffuse soundfield. With a live performance, where there is the visual confirmation of who's playing what, I suggest that imagery isn't very important. At home, however, we don;t have the visual, so accurate imaging becomes important, at least to me.Agree on 'imagery'. It is still a fuzzy topic.
The main practical drawback to multi-channel is multiplicity of wiring(aesthetics) and loudspeakers( cost and aesthetics). Then, how many people can be bothered with it? Similar to the old Quadraphonic days. It is a bit like 3D TV, not so convincing.
I've found that for accurate imaging, the loudspeakers have to be closely matched, and many of today's loudspeakers are not that good, several dBs difference between the loudspeakers at certain frequencies, and this screws up the phantom image. Match the loudspeakers to 1dB across the audio band, and imaging becomes very tight, and the loudspeakers 'disappear' insofar as they no longer draw attention to themselves. When I equalised my own 'speakers to +-1dB from 200Hz-20kHz and pair-matching was well under 1dB, the imaging improved immeasurably. (immeasurably as I have no idea how to measure imaging!)
I still enjoy Quadraphonics, but not because the surround is accurate, but just for the sheer fun of scraping 4 channels out of an LP. I can completely understand why it failed, three (or four) competing and incompatible systems, none of which worked very well, or not for long in the case of CD-4, and the domestic difficulty of positioning four loudspeakers correctly. Hell, few people manage to get two loudspeakers positioned properly for stereo, what chance four loudspeakers? Nevertheless, my modest collection of SQ encoded LPs is growing slowly, but I have to recalibrate my head whenever I play one as HiFi it's not.
S.