Because you get around some of the limitations of DAC chips and get to choose your own modulator as well. Since in modern DAC chips and also in this case (all are SDM DACs) the sound largely depends, in addition to the conversion stage itself, on the digital delta-sigma modulator.
Sure, you can do it with some DAC chips as well, like the more recent AKM ones that have DSD Direct mode, and with TI/BB chips fed with DSD.
I have this Cyan DSD and also both Spring 1 and Spring 2 DACs and running at DSD256 they sound about as neutral as the RME ADI-2 running at DSD256, with less characteristic sound than ESS Sabre which always seems to have it's own immediately recognizable characteristic flavor (and doesn't support direct DSD). The on-board AKM chip to convert PCM to DSD has surprisingly poor performance though, I would have kind of expected more from AKM.
Given selling price of these, like Holo and Chord, surprisingly they are not really more expensive than comparable chip-based designs either.