Video vs Audio is not an equal comparison. If due to latency a frame (Video) is dropped, you’ll not notice, only when more frames are dropped. This behavior you don’t want with Audio.
The reason to upgrade the PSU for the DAC is to improve the analog output, not for the digital domain. There are checksums build for the digital communication between rPi and DAC. If the checksum fails, the digital data will be resend. As long as the buffer is filled, you’ll not notice this.
Until you get to the point that he buffer is empty and the checksum fails again. Them the audio will start stuttering as there is no data to be played and the DAC is waiting for Audio data.
Stating that the details are being reduced, is simply not correct.