A major reason is that you can't really get away with the crappy loudness war style mastering on vinyl. Just because of that they sound way better than most digital masters.
There's also the well-known effect where the process of recording and playing a vinyl creates dynamic range (as measured by various tools) where there is none. Some vinyls that are known to be from the same master as the CD still get much better scores on http://dr.loudness-war.info/
A very nice technical discussion of this myth is here: http://wiki.hydrogenaud.io/index.php?title=Myths_(Vinyl)#Myt...
It's actually quite ironic, I think, that compression has become such a fad only now that we have digital media with their much lower noise floor. We have more dynamic range available, but we're using less of it.
The point is that if you want to make a vinyl sound "as loud as possible", you're best off not compressing it, since you can have higher peak volume in one groove if the adjacent groove is quiet. Whereas when mastering a CD, the way to make it "as loud as possible" is just to crush everything up to 0dB.
What makes compressed music sound "loud" is that there's some sound present to the ears at full volume, or nearly so, at all times. It's not that it simply has a higher peak level. Indeed, it's the listener who controls the peak level of the sound that reaches their ears, not the recording engineer — they can always turn the volume up or down as they please. The reason compressed music sounds "loud" is that it has a higher average volume than uncompressed music of the same peak level.
I don't think that can be right - sound is a waveform so even the loudest notes will oscillate around zero. "Loudness" would usually be defined as something like root-mean-square amplitude, but if we zoom in to talk about a single note (sine wave) then the peak amplitude and the RMS amplitude are in a direct relationship with each other. On the scale of a whole piece, yes there's a difference between average and peak, but on the scale of one groove to the next - a couple of seconds - I don't think there's any practical difference.
The complaint I've heard about "loudness wars" e.g. Californication is precisely that there are no soft passages - every bar is pushed up to full volume. I'm not aware of anyone talking about the effects of compression on a smaller scope than the couple-of-seconds scale.
Sure. When I refer to "peaks and valleys" I'm talking about the envelope of the waveform. I think that's standard usage in audio engineering.
I think you should download Audacity or equivalent and look at some waveforms of both uncompressed and compressed music. I think you'll see that there are loudness variations on a much shorter timescale than you expect, and that compression reduces these considerably.
But I like the rituals around it: taking the album out of the sleeve and looking at the artwork; placing the album on the table and setting it to spin; lowering the needle. I like how I have to purposefully listen to the music - you can't just set up a playlist and walk away, you have to pay attention to the songs and flip over the record once the side is finished, or put the second disc on.