That's true, some older receivers didn't have the processing power to decode HD lossless streams, and apply room correction at the same time, but when fed an already decoded LPCM stream from a source they could do just fine. Also some receivers will not let you apply Prologic to DTS streams or the other way around, but allow either matrix expansion to be applied to LPCM.
As I've said, bitstreaming is a hack left over from Laserdisc days, it served its purpose, but it's time to go back to letting the player do the decoding, just as it does for video frames (your player doesn't send the AVC/VC-1 bitstream to the display, it sends unpacked frames).
