it's gotta be the internet compression you are not liking... none of the amplitube distortions sound lik bit-crushing to me. have you heard or tried amplitube fender? those amps sound spot on and i'm looking forward to the same out of amplitube 3.
i'd say try the demo after it's released before making any final decisions on it's sound.
to me any downside is completely negated by the ability to get a great tone without a proper room, mics, and physical volume... especially the volume part. i'm pretty sure my neighbors would not dig my 3am jams!
