The Chicago Quadio was a sellout, the Aretha was a mis-step, but that program did not fail because they were quad only. It failed because it got swept away in a corporate reorganization.
A limited run of specifically targeted releases of surround only has been done twice, once by DTS and then by Rhino. Both programs were fairly successful, so we know that it can be done. It was also attempted by Music Valet, who released their first DVD-A from Better than Ezra, but faded away for the present time. (I wonder how Richard is doing and what the status of Music Valet is)
It's a shame that one of the victims of the SACD/DVD-A era was the DTS CD, as in many ways, that was the format that gave rebirth to surround music and it's a shame it did not live on. There were some amazing new discs released like the Don Henley and Sting titles that never saw the light of day as SACDs or DVD-As.
And the Best of Aretha was not a "major" misstep afaik, just not a real hot one compared to CTA. The CTA being a double album, and one never on commercial reel to reel format, one of the original band's finest efforts - was a slam-dunk. I think it made Aretha look worse than Aretha deserved to look in sales performance. Many other titles would of been small run sellouts, but it would most likely been in a few years time, and not just 3 months to achieve that. I think CTA was all gone in less than six months.
The main reason I see a "surround only" disc release being a success is the cost control associated with not mastering for stereo. Once you eliminate the Bernie, Kevin, Steve, Stan Ricker or Doug Sax type billable hours for stereo, you are trimming a minimum of $1,000 to 2,000 off the production cost of the (stereo + surround) disc right there. I've also read that each layer is a license fee for publishing (to publisher), if not also mechanical fees paid (stereo + quad master tapes to label) as well. I'm not sure on this (if each layer is a licensing fee).
Over-all, the budgeted cost is reduced by not paying licensing fees, nor having pay a top mastering guy's fees for a stereo layer.
So with thousands trimmed from the production budget of the project, you have a major cost savings and the break even point comes much sooner. You even have money left for mini LP-type jackets, and an obi strip to make it stand out as a "SURROUND-SOUND" only product like the beautiful Quadio packages had.
Then you only issue titles that are still white hot! Since you no longer worry about the competition from a MFSL, AP, etc. you now can concentrate on pure class-A titles for this particular series. And since you are issuing only the real hot ones (already desired in stereo by those other SACD and vinyl companies), you are again at much less risk of a retail "stiff".
It's just a brave thing to do. And one must accept smaller runs in the current economic climate, and music industry reality than what could have been 10 or more years ago.