You can apply all sorts of processes to the audio, but to the end user it's not obvious. So, using your list, if we start with simple stereo sample playback in the 90s, we can add "reflection" in 1998, "refraction" in 2004, "diffraction" in 2007, "dispersion" in 2010, "propagation" in "20012", and be looking forwards to "transmission" in 2013 next-gen games. The differences some of these make to the audio aren't particularly obvious, unlike almost every visual effect we have. God rays, lens flare, subsurface scattering, screen-space ambient occlusion, SVO lighting - every step is obvious and contributes. Every step changes the graphics notably, giving developers and gamers an obvious sense of progress. With audio, you don't get the same ROI. You can add reverb and everyone notices it. You then then improve the reverb algorithm and get a cleaner sound but it'll be lost on most people. You need a massive sea-change, a whole shift in the audio, for people to notice the difference and value it. Hell, many folk think better audio is just cranking up the bass!
As for not requiring special hardware, ideal audio may well be doable in realtime on CPU, but the CPU already has its hands full with the rest of the game. Unless devs want to make sacrifices in more obvious places, dedicated hardware that is far more efficient is certainly going to help, or even be necessary, to encourage adoption of better audio.
As for not requiring special hardware, ideal audio may well be doable in realtime on CPU, but the CPU already has its hands full with the rest of the game. Unless devs want to make sacrifices in more obvious places, dedicated hardware that is far more efficient is certainly going to help, or even be necessary, to encourage adoption of better audio.