In reply to:
...Do we really want to feel immersed in the middle of a band?
In many cases I must answer yes.
A common argument against multichannel sound is that it's unnatural -- that the ultimate goal is to reproduce the live audience experience.
I would argue the ultimate goal is obtaining the most satisfaction possible from the reproduced music, regardless of how closely that mimics the original acoustic experience.
In some cases the experience is richer and more vivid if the acoustic pallet is spread around you. Heavily layered instrumental music may be in this category. A perfect example is Pink Floyd's Dark Side of the Moon. However unnatural to have sounds all around you, it sure sounds great.
Other more simple arrangements place the performers up front and use surround for ambiance, not placing instruments or performers beside you. That's a different but equally valid use of surround.
I personally like heavily instrumental multitracked music, so the "immersed in the band" paradigm is fine with me.
In fact it's really little different from headphones, which some people find very satisfying.
There's no question the mixing engineer must exercise skill and discretion, and it's easy for a multichannel mix to become contrived, artificial, and gimmicky.
But the best multichannel mixes show "how it's done". It need not be artificial and hokey.
