lchiu7: Maybe because he thinks the external DAC does a better job than the one in the AVR. And for most AVR's if the input is digital, then you cannot always apply sound processing effects to the signal such as Dolby Pro Logic Music etc. Of course one could argue that this not music in its purist form but many people like the soundfield enhancements they provide.
Yes I'm a purist, I don't want any effects added to my music. I use direct mode on my AVR amp which bypasses the internal processing and internal DAC. My external DAC is of a much better quality then the one in the squeezebox and the one in my AVR.