The engineers who designed the original CD specs were no dummies. It's the loudness warriors who came later that defeated all their hard work.
A 16-bit sampling depth is pretty good, that allows any real world sound pressure level to be quantified to 1 of 65536 different levels. Think about 130 reams of paper stacked on top of each other, each sheet would be a different possible level. If a recording makes use of the full dynamic range of a CD it can be really impressive.
Nyquist was also a smart guy. Humans with perfect hearing can pick up sounds into the 20kHz range. So a going out into the real world and quantifying the sound pressure level once every 1/44100 of a second--stop to think about that, 44100 times a second, that's not something you can't perceive on any level--does allow (properly aligned) signals up to 22kHz to be represented.
Well mastered CDs can sound amazing. Just as poorly mastered DVD-As can sound horrible (Flaming Lips, At War with the Mystics, I'm looking at you).
