Because unless you're listening in an anechoic room - which is Not Fun - reflected ambience creates a hemispherical sound field around an acoustic source, and stereo recording only captures a small sample of that. (Enough to create a 2D spatial illusion, but no more than that.)

And also because loudspeaker technology is still pretty terrible compared to the rest of the audio chain. Converters are nearly perfect, amps can be made close to perfect at non-trivial cost, microphones are okay but usually add some colouration, but even the best studio-grade speakers have limitations and add significant distortion.

And consumer-grade speakers - even expensive ones - are nowhere close to perfection. And even if they were, you'd still have to deal with room resonances in the performance room, which would add extra colour to the sound that wasn't present in the original recorded ambience.

Basically hifi is good enough to be musically enjoyable in a near-enough not-too-distracting way, but you need research-grade technology - like complex wavefield speaker arrays and acoustic tuning of the performance space - before you can record and reproduce sound almost transparently.

> loudspeaker technology is still pretty terrible compared to the rest of the audio chain

Which also goes to my point that arguing about which is better, analog or digital, is utterly pointless.

This is absolutely true. I have had several experiences of knowing music was live at a distance of several hundred feet, through nothing but how it sounded. And like you said, it's easy to tell primarily with "analog" instruments like brass, accoustic stringed, woodwind, drums, etc. Basically anything where the sound comes from the vibration of something besides a speaker.

Come to think of it, maybe that's why? Maybe the intrinsic harmonics of speakers cause overtones different than the material of the instrument? Or, similarly, maybe the material of the recording microphone changes the harmonics levels compared to the human ear?

I thought I could tell too but once I thought I heard live music coming from a long way off by it turned out to be coming from a relatively small portable speaker attached to a man. I was surprised but now I no longer believe I can tell the difference from a distance.

The kinds of sound systems people commonly encounter aren't that good. Also, people bring their expectations with them when they listen to recorded music. With appropriate equipment and a suitable listening environment, it's possible to fool a blinded listener.

I also notice this effect when at a concert. If they play the violin without amplification, it sounds much better then when they do.