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Originally Posted by Sehnzeleid
I figure if the PS3 has the ability to transcode DSD into PCM or DTS, HD decoding doesn't seem out of the question... 
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That's faulty reasoning. DSD has very little if nothing to do with DTS-MA, and just because something decodes DTS doesn't mean it can do MA. MA requires different hardware decoding.
I think people have gotten too used to firmware updates and sometimes think they can do magic things that the hardware won't support. I'm not saying that I know for sure that the PS3 doesn't have the hardware to decode DTS-MA, but the fact that we haven't seen it yet after the player's been out for a good while makes me think it may never happen.