The frequency cap is not the only reason why CDs have trouble competing with vinyl. The dynamic range is also an issue. The sound of a snare drum goes to something like 145 dB for the tiniest fraction of a second after it's hit, so any system which limits you to a 96dB dynamic range won't be able to reproduce this authentically.
Also, IIRC, the difference between intensity levels represented by consecutive bit values in CD audio is constant regardless of loudness, i.e. the difference in intensity between what is represented by the number 60,000 and the number 60,001 is the same as it is between 12 and 13. As the ear is not a linear device but (approximately) a logarithmic one, and as 16 bits limits you to only 65,535 possible values across the entire range, that means that means that towards the quiet end there simply aren't enough possible values to give an audibly smooth signal.
The difference between a good CD player and a bad one is not that the good one is reproducing the CD recording more accurately, it's that it does a better job of working out what the original recording must have been like in order for the CD recording to eventually end up in the mangled state that it's in.
I think it's a great shame that all they seem to be doing with modern audio formats is messing about with multichannel sound. Nobody listens to music sitting in the middle of the orchestra, that's just silly. If they concentrated on providing a 24-bit 96kHz recording medium in stereo then that would do wonders to the actual quality of the sound. That probably would challenge high-end vinyl.
Mind you, I think binaural recordings are a good idea, so what do I know?