Why is 2 Channel better than multi-channel?


I hear that the music fidelity of a multi-channel AV Receiver/Integrated amp can never match the sounds produced by a 2 channel system. Can someone clearly explain why this is so?

I'm planning to upgrade my HT system to try and achieve the best of both worlds, I currently have a 3 channel amp driving my SL, SR, C and a 2 channel amp driving my L and R.
I have a Denon 3801 acting as my pre. Is there any Pre/Proc out there that can merge both worlds with out breaking my bank? Looking for recommendations on what my next logical steps should be? Thanks in advance.
springowl
I dumped my MCH system not because it didn't sound good. it sounded great. i gave up trying to find MCH music SACDs and DVD-As that I liked enough to pay $15-$25 for. Now I have excellent 2 chan with lots of CD and LP choices. If I want MCH music, I rent a DVD video and listen/watch in my HT. Best of both worlds.
Cinematic_Systems: Could you clarify the following statement for me please? "There is no real decoding, except for system adjustment like distance your seated from the speakers." It's the decoding that is what I'm trying to grasp. Are you using decoding in the Digital -> Analogue sense and there is no 5 channel feed or something different? The reason I ask is it seems to me in a multi-channel environment regardless of what the source is sending it, the processor algorithms are what decides what goes to each speaker. That seems to imply the processor is one of the most important pieces in the chain. Following that same logic, makes me wonder why so many claim a mid priced receiver, with sufficient power of course, is all that is needed to get great surround sound.

I guess what I'm trying to figure out is, is it all the processor's interpreted sound fields or something else?
" The reason I ask is it seems to me in a multi-channel environment regardless of what the source is sending it, the processor algorithms are what decides what goes to each speaker." Only with synthesized or matrixed materials. With discrete sources, what is in each channel is decided by the mixing engineer. The only user options are level, delay and bass management. (Well, EQ, too, if you have that facility.)

Kal
In my experience very few recordings sound completely right with matrix (algorithm) decoding. Regarding cost, a low cost matrix decoder uses the same algorithm as the most expensive unit. The hardware will differ, and (hopefully) sound better.
Kal said it better than I could.

"Following that same logic, makes me wonder why so many claim a mid priced receiver, with sufficient power of course, is all that is needed to get great surround sound."

Actually your description is not a qualifier. It depends which mid priced receiver. The one on my system with the speakers I built to run on it is spooky good for $750. But you can't change the receiver to another brand and expect the same sound. ie. Denon, Onkyo etc.

There is a certain way surround equipment should be setup by the manufacturer or you can forget good sound no matter how much you spend. We live in a software world, the days of the brute force uber faceplate to the rescue solution is over. Smart equipment is slowly creeping in, and taking over. People who build real surround processors don't chat up their WBT connectors and 24/192 UBer DAC's, they point out the processor bank which allows proper speaker setup, room correction and EQ, and other essential setup parameters to be changed to put that unit in your world perfectly in real time.

Software rules, ie your bombs may be bigger but my bombs land EXACTLY where I want them everytime. You lose. :)

"That seems to imply the processor is one of the most important pieces in the chain."

Equal to the importance of the speakers, in many cases.