Whew!!
That is an accusation and a half! (Meaning not to contradict it - I have little experience of such commercial products, but these things should be "transparent".)
Firstly not to be pedantic but a passive pre-amp is one of those irritating misnomers. It should be a passive or active control unit. A pre-amplifier means per definition that there is amplification.
This description is also to my mind more accurate of its purpose. With respect, Furrycute, a control unit should not only control volume, although that certainly is the main purpose. I don't want to start the whole debate again on this thread (has it been done elsewhere?) but there is well-motivated use for also some form of tone compensation, input level equalisation, and sub/ super audio filtering.
Just the briefest motivation: We can perhaps accept that tonal correctness is looked after on the CD (though it is often clear that that is not the case) so tone controls should not be necessary. But what about room acoustics? What reaches the ear is mostly no longer what is on the CD. It could be said that three-way tone compensation is far from ideal; sure. But it is better than nothing. And please, let us not have the comment that tone controls degrade the signal. When set at zero compensation, they have (or should have) no audible effect. This has been tested to death.
Sub and super audio filtering is also fraught with argument, but it can be shown that signal products in inaudible regions can cause objectionable artifacts - filters are cheap and simple enough these days.
About transparency, the above members' experiencers are serious. Where are folks cutting corners? I would like to see such circuit diagrams. Not to boast; just for the record, because I am familiar with it, in a fairly extensive transistor pre-amplifier I use 12 transistors plus controls (per channel), and folks claim that quality is indistinguishable from a straight wire. (To be complete I must add that the transistor count includes an RIAA phono stage.) At pre-amp signal level this is not a particular achievement.
So what is happening? Why the audible effect?
(Furrycute, I would agree that "amplification" with the output levels of most CD or DVD players is not necessary. My own device provides for line inputs of 150mV from other devices, but perhaps overdone. No argument there.)