What really should have happened, when the loudness war started to rise in the mid 90s, was for manufacturers to replace volume knobs with loudness knobs, with some (dynamics) compressor attached to it. Keep the volume knob, but make it something special common people wouldn't need to touch. That way people could turn up the loudness, which in effect would not just increase the amplitude but also compress dynamics.
Because altering [i]loudness[/i] is what people actually want. If they are on a train or in a loud environment they want to amplify the amplitude AND compress the signal to be able to hear the full recording. At home at a party you'd want to be able to hear all parts of the music properly and have high volume by just cranking up the knob to 11. In a quiet environment you'd want to be able to experience the full dynamics. For knowledgeable people we'd still have volume knobs to really alter the volume. In the end you could have tuned every well-recorded record to the environment you're in. There would have been zero benefit and need for the insane levels of compression we're seeing today.