There's a caveat here: a computer used as a transport NEEDS a good sound card and a good DAC to sound good. Of course a dedicated transport also needs a good DAC.
If I were to do it afresh from the ground up, a computer + good sound card + good DAC makes greater sense because it has the flexibility to play higher than-CD-resolution files.
Totally agree! Most sound cards leave a lot to be desired when compared to exotic audiophile gear. But then, come a few notches down and they give mid-level audio gear a good run for their money.
Digital audio was kept like a secret. Till around 2000, audio manufacturers rode on the digital-unawareness and managed to charge exorbitant sums for mediocre gear digital gear. It wasn't until entry level players (Baresford, Cambridge Audio, Benchmark, NAD) came with budget-priced products that these companies started to think of offering their products at more earthly prices.
Today's high end sound cards are better than many multigrand DACs of yesteryears. And they run neck to neck with equivalent products from audio manufacturers 1.5 - 2 - 3x the price. The challenge in dealing with digital audio is to get rid of the electrical noise. And with digital technology having outpaced the Moore's law, it's only a wee bit harder than kid's play.
The red book format asks for a data rate of 1,411.2 kbit/s. Today's computing devices can supply that amount of data even when processor is running red hot with 80% utilization. The only thing that can interrupt a computing device from supplying data at such a low rate as required by the red book standard is a system deadlock. Unless a computing devices gets engaged in in a deadlock somehow, supplying the data at the 1,411.2 kbit/s is a piece of cake, even when processors are really really busy. Afterall, today's peripherals are capable of multi-million bits of data read out.
The next dreaded challenge (and one which the audio manufacturers are still riding on), is of uncertainty about the continuity of data supply. But then, if there is a problem, there are solutions. Nothing, absolutely nothing, stops manufacturers from building a small memory buffer and have a clock reclock the incoming data reading from the memory buffer. In laymen's terms, does our life stop when there is no water in the government water pipes? No, we have learned to work it around. We store water locally in over the head or underground water tanks. That way we don't have to depend on government water supply. Audio manufacturers who consider jitter THE PROBLEM in digital audio, should learn from water supply system. People don't depend on government supply lines, they just draw locally and fill their storage when water is available. Getting the data out of a computer's chasis is the same. Its no big deal if the computer cannot supply data constantly. There are many workarounds. And that is not even keeping in mind that a computing system runs on a way way faster clock rate and the clocks they use internally is hundreds times faster than those used in CD players.