The only time I was OK with an *exclusively* chip (PSG) soundtrack on a CD-ROM was when (1) all the data was used for Red Book audio accompanying cinemas and/or (2) all the data was used for compressed video...
An other way to think : keep the feeling of the platform. Redbook audio does not uses specifics audio abilities of the hardware. It's just audio CD.
Otherwise, I was always disappointed when a developer didn't take advantage of the opportunity for Red Book soundtrack.
Because sound devellopers kept the feeling of the soundchip. Recent example like Pier Solar. It uses Mega-CD's soundchip or Genesis' YM2610. (Sonic CD or Popful Mail are also good examples) On PC-Engine you can use PCE's sound chip + IFU's PCM sound chip. Redbook is an easiness.
In short, the Henshin Engine soundtrack blends the best of both worlds—PSG "inspired" songs that have the chiptune aesthetic at their core, but with composer free to be more creative than a purely PSG soundtrack.
The quality is not the "purity" of the sound but the arrangements, by using abilities of the sound chip. There no good or low quality between redbook and hardware produced music. Just a different approach.
Listen at Magical Chase BGM
http://wellby.dyndns.org/dnl/gk/mc_end.mp3,
Street Fighter II
http://wellby.dyndns.org/dnl/gk/snd/sf2-staf-pce.mp3or Snatcher
http://wellby.dyndns.org/dnl/gk/Snatcher.wav.
These games have wonderful soundtrack only using sequenced music with the HU6280.
I hear you, though... It would be amazing to have a complete Red Book *and* PSG soundtrack that could be switched back and forth "on the fly" (see Vasteel)... But that would be placing a *ridiculous* additional burden on an already-burdened development team.
That is a best argument than "
I was always disappointed when a developer didn't take advantage of the opportunity for Red Book"
At the time, redbook was used by the devolopers because it more simple to compose music for than to program directly a sound chip.
But nowadays, the chiptune became acceptable. It's no more a gap between "real audio" and "electronic rendered audio". For preserve the authenticity of the support, you may use real chiptune, not a fake BGM simply recorded on audio CD.