For AK case, I guessed it was because they are opening up a new market of expensive DAP, so since they thought the AK100 sells so well even though there are complaints of it being overpriced. That's when they decided to up the ante by putting a higher (if not ridiculously) price tag on AK120. Well, that's just my speculation. I still like how it sounds, just that I wonder what justified it.

My beef is, even though there are so many DAPs on the market, why don't someone produce something really usable and sounds excellent? I guess it's too subjective for that matter, as engineers have different design concerns.

I was wondering, like the recent case of RWAK and Fiio X3, 3rd parties offer "upgrades" from changing the DAC chip of 8740 to 8741, and op amp rolling from warmer chips to neutral chips. What confused me was, if the "upgrades" do improve the SQ, why don't the manufacturer do so? Is it because of design issues or just costing? Anyone have any idea what's the insider reasons?

The 8740 is arguably a better chip. I agree with RudeWolf - the upgrade is a waste of money that won't yield audible improvement and adds the risk of a botched replacement.

Manufacturers are well aware of the selection of DACs and OpAmps out there, engineers tend to choose the right one for the right implementation. Cost -wise the difference between these chips is usually only a few bucks. Since the DIY & commercial modding community is pretty robust it's not too surprising that people hype up specific chips as magic bullets (usually based on hearsay and datasheets) and offer all sorts of weird replacements.

Though it doesn't have to be said - pay someone the cost of your player for a mod and you have a damn good incentive for hearing an improvement.

There's a high probability of expectation bias playing a role in the whole audiophile kit and caboodle.

Definitely, this is why it pays to keep bias in check through controlled critical listening, peer review, measurements and further experimentation - just as you did with your T50RP mods. Luckily that's pretty much the norm here.

I guess it's too subjective for that matter, as engineers have different design concerns.

Very often this.  I know Nick Leckerton loves the 8610 for various reasons and it was the original choice he picked for his lineup years ago.  Personally I find it sounds too 'entertaining' and not as technically proficient as some other alternatives.  This is a subjective preference wrt to personal tastes, and gear selections.  That's not to say there aren't objective reasons to explain an audible preference for one over the other.  Everything has an objective explanation whether we happen to know it or not at the time.  Regardless, that's a different discussion.

If people can't agree on what the best sounding speaker is, or the best sports car, you will be hard pressed to find overwhelming general consensus on opamps or DAC chips.  There is no 'correct' choice between chocolate or vanilla.  That also doesn't mean they both taste the same either or exist as marketing ploys to prey on the foolhearty.  Though I'm sure a person can convince themselves that chocolate does taste like vanilla under the right conditions.