Sound quality is a low priority when devices are made to be PMPs and do everything, so it's not really a surprise. The market for a digital audio player is quite small now, and so the only people making DAPs with decent hardware are smaller Chinese companies who don't have the nous or money to develop fancy UIs. I think the D12 has the same DAC as the S:Flo2 (and upcoming FiiO X3), it's just the amp stage of my player that could use ugrading (the LO is also more neutral than the HO). The Hifimans all use even more high-end DACs which I'm dying to hear. Problem with all of them is the components are all power hungry so they chew through players batteries at a rate of knots.
The thing I like about the CypherLabs product is that it will mean I get a reference quality DAC but still get to use a UI that doesn't suck, plus things like smart playlists e.t.c. Size is a bit of a concern but the Arrow and newer Touch are wafer thin. Also means separate power for each stage of the chain, which means charging will be a bit of a bugger but hopefully overall battery life should be better.
Cowon's player's house sound is a bit meh for me. Sure it's flat/neutral but it's also rather thin and dull. You have the BBE EQ on the touch Cowon players but a decent player/phones shouldn't need EQ'ing. My 3GS gets absolutely destroyed by the S:Flo2, which is annoying because it means I have to keep using it. No EQ'ing can change the soundstage, level of microdetail, roll-off e.t.c.
Anyway, portable hifi has come a long way since the days of the iMod! The best hope lies in the East since China has quite the audiophile market and the players are slowly improving in quality.