If you follow the guidelines..., you can achieve dynamic range that’s superior to red book audio and a final product that’s virtually indistinguishable from the original recording.
So the task here for engineers is to make a compressed AAC file sound more alike standard CD audio, which runs at an uncompressed 16-bit 44.1kHZ quality. On a technical basis, this isn't possible due to the vast distance between these two differing audio types; but something like this should be based more on a matter of opinion rather than that of technical mastery.
Most people will not notice the little-to-no difference between the CD version, the AAC encoded rip from said CD, and the 'Mastered for iTunes' version of a song; but as a null test will prove, this faithful rendition of the physical media copy isn't so faithful.
In the past musicians have complained about how the music that is listened to on an iPod is of a deteriorated quality to that of what is played in the studio, to which we can always suggest the option of providing the ridiculously sized 24-bit 96kHz files created in the studio, or the raw .flac song files. This has never been Apple's approach to the digital music market, as it has always focussed upon sticking strictly to providing assistance to sound engineers (whether they choose to follow it or not is their perogative), and improving the likes of their compression toolchain, without trying to compromise the file size.
And who can blame them, the portability and immediacy of the iTunes music store would be severely tarnished with a 50+mb song. But this doesn't diverge from the fact that the marketing portrayal of 'Mastered for iTunes' sounding more faithful to the physical copy, and what the artist and sound engineer intended is incorrect. This doesn't mean it sounds better or worse, as this will be more of a subjective opinion, sometimes it sounds better and others it don't.
At this level of minute difference though (however much deteriorated the sound quality is) it's sort of immaterial to most, especially since the white earbuds packaged with any iDevice are inferior to picking up the intricacies of a song anyway. What matters is people actually believe that 'mastered for iTunes' songs sound better, which is something of a reality distorting ideal: definitely one of Apple's unique strengths.
I am the Founder and Editor-in-chief of New Rising Media. You can follow me on Twitter @MrJasonEngland.