Have you seen the actual frequency response curves of headphones? They are by no means flat! They can approach flat from 20-20k, but there are always trade offs, at least until you get to certain price points.
What is good or bad sound is largely subjective and socially conditioned. The expectations around binaural recordings of natural sound are very different from highly produced studio production. What is bad in one context is good in another and vice versa. And while I'd go for headphones with better frequency response, it's not the be-all end all measurement either.
Then again, maybe Beats are a tragedy, since we are getting to a point technologically where every headphone could have reference class performance, if that is what the market wanted. That's not what the market wants. Maybe that's the real tragedy.
