Why the obsession with the lowest octave

A couple of responses mention lower overtones. This is not correct. An overtone is a frequency above and some multiple of a fundamental frequency. Thus the first couple of overtones for the 42 Hz of an open E string on an acoustic bass are 84 and 168 Hz. There is no 21 Hz overtone.

http://en.wikipedia.org/wiki/Overtone

From demonstrations I've heard, the most important benefit of a subwoofer (or bi-amped full range speaker if the bass crossover is low enough) is improved clarity and definition in the upper-bass, lower-midrange. I think this results from removal of the lowest source frequencies (requiring the greatest energy) from an upper bass driver and the main amplifier. I've found this case no matter what type (frequency range) of music is played.

"removal of the lowest source frequencies (requiring the greatest energy) from an upper bass driver and the main amplifier"

That is usually a good thing and common with a good sub setup.

Also true with good full range one box designs that are not undersized and do not ask small or lesser bass drivers to do too much alone.

I am of the opionion that a well executed Walsh bass driver like those found in modern OHM Walsh line speakers, is an inherently optimal approach for delivering balanced coherent, and extended bass from a single driver.

When I had my Nelson-Reed 1204s [4 12" drivers a side] subs set up my favorite demo record was "Ancient Dances of Hungary" on Harmonia Mundi. The weight of the low strings was felt much more even though the 12" woofer in my main speakers went down well below their range.

Its fundamental

From Wikipedia:

"A distortion is the alteration of the original shape (or other characteristic) of an object, image, sound, waveform or other form of information or representation."

So if it is in the source but not heard, it is an alteration and can be considered a form (by omission) of distortion.

How acceptable is it in those terms now, audiophiles?

This is truly how I look at it personally and why I find I cannot be satisfied fully (despite being satisfied greatly still though in practice ) by even excellent smaller speakers otherwise that punt by design and chose to omit the lowest octaves in order to achieve greatness.