Earlier quoted context omitted.
I keep FLAC copies just so that I have lossless versions that I can convert into the lossy format du jour, but for actually listening, I mass-convert to lossy. I've listened to FLAC and properly encoded MP3 files (@192 and 160) on $50,000 audio equipment, and I can't tell the difference.
I'm curious, did you listen in a properly treated room? As in with bass traps, panel traps, diffusers, a cloud, first reflection points covered, etc? Because I can hear a difference on less that $10,000 of playback equipment, but in a fully treated listening room. And I know from the days when I used an untreated room, there would be no way I could tell in an untreated room, even with a million dollars of equipment.…
I humored him by teasing out which one was which without him noticing, and then saying the lossless one sounded better. Didn't want to hurt his feelings. And really, the sound system as a whole sounded awesome. I just couldn't tell the difference between the formats.