High-resolution formats like Blu-ray, DVD-Audio, SACD, and LP are all capable of delivering superb sound quality, but having music in those formats doesn't automatically guarantee great sound. The recording itself would first have to sound great, or to put it another way, a great sounding MP3 would sound better than a heavily compressed and studio processed 192-kHz/24-bit Master Audio Blu-ray.
Worrying about what sounds better--FLAC, WAV, or AIFF files--is a total waste of time if you're listening to an Adele or Black Keys album: the music's processing levels are so extreme, there's nothing for high-resolution formats to better resolve. With classical music or opera it's a different story. Those recordings might have their full dynamics intact, but most of today's rock, pop, hip-hop, and rap is squashed flat, so it's loud all the time. They're mixed and mastered that way, and lossless files can't magically restore what isn't there.
There's a visual analogy to be made: digital audio is more like photography, and analog is more like painting. Digital can capture a near perfect copy of the mix, but analog adds colorations and distortions to the sound, which many listeners prefer to the harsh reality of digital recording. Maybe that's why analog scores such a decisive win for some listeners: you feel the music's emotional power more on an LP than a CD or FLAC file.
Neil Young recently expressed his concern for declining sound quality standards to MTV News at the Sundance Film Festival: "I don't like it. It just makes me angry. Not the quality of the music, but we're in the 21st century and we have the worst sound we've ever had. It's worse than a 78 [rpm record]. Where are our geniuses? What happened?"
There are always exceptions. I recently heard an interview with singer-songwriter Jessie Baylin on NPR, talking about her new record, "Little Spark." She said the music was recorded to two-inch analog tape, so I bought the LP, which comes with a CD, and the tunes on the LP really do have a timeless, sophisticated pop music feel. The CD is a pale and crude rendering of the same music. I'm not claiming all LPs sound better than their CD counterparts, but Baylin's does.