Multipath is an FM problem.
Dynamic range, as someone else pointed out, is a processing "problem."
I have an average Philco tabletop radio, plastic case, nothing fancy... but it can sound really, really good depending on the station.
The AM radios were getting better and better, & then two things happened:
#1 - Transistors allowed for tiny radios which, but design, sounded poor since they were coming out a 2 inch (or less!) speaker. Remember those awful white plastic earplugs? I genuinely don't know how they got that much distortion out of an "earphone!"
#2 - FM came along, which gave classical listeners a nearly silent background and stereo.
As listeners moved to FM for music in the 70s & people depended mostly on AM for news weather and traffic, manufacturers saw no reason to spend the money to produce quality AM... especially after the AM = bad, FM = good mantra had made the rounds.
The more people moved to FM stereo, the less manufacturers had to worry about AM fidelity. Selectivity because people's only complaint as a generation grew up with truly atrocious AM sound. I had a Walkman-type radio that had a listed distortion level on the AM side of 6%!!! People only cared if they could hear the weather reports or sports, and the manufacturers followed the money.
By the time AM stereo came out (and its promise of wide-band receivers), music was nearly gone from AM, and neither sales people nor listeners had a clue.
I argued for several minutes with a sales rep that an AM/FM stereo was not an AM stereo / FM stereo radio. He kept saying, "sure it is! See? Says 'stereo' right here!" :
Friends who I talked to about AM stereo said, "great... tin-can audio in TWO channels now.. why would I want that?"
I'd make them cassettes off my Sony, I'd tune their factory-installed AM stereo car receivers to a stereo music station, I'd drag friends into stores and demo stereo AM for them (if we could get a signal inside a building encased in steel and lit with fluorescent bulbs)... they just didn't (or wouldn't) get it.
By the time I had (a few of) them convinced, they'd say, "O.K... but what on AM justifies me spending that kind of money? All I want to do is listen to the ball game (which is fed on a phone line) or hear what the TV meteorologist has to say (which is also fed via phone line).
Now we have bone-crushing compression on FM similar to what those who originally left AM were running from in the first place. We have rim-shot FMs trying to be a local signal, creating multipath and hiss not unlike the noise we used to get on our favorite AM stations.
There is no good solution to this. If you could offer free upgrades of all of the AM radios in your Arbitron-rated market (which is financially and mechanically impossible) you MIGHT be able to compete with music FMs. MIGHT.
The AMs are going to go for pennies on the dollar, and will be picked up by those looking to do hyper-niche programming. It won't be pretty, but if you can pick up a dark station cheaply enough and super-serve a group that has no alternative on FM, you have a chance of... well, of at least of paying the electric bill.
I foresee a day where AMs are basically audio "billboards" for internet streams.
I also suspect (hope?) that someday the FCC will come to their senses and eliminate IBOC for AM and maybe FM. FM in particular was a solution looking for a problem.. I have yet to find any reports indicating the FIDELITY of FM was a problem for listeners.
Do something totally unique on AM, and you have a chance of winning your audience. However, if you're TOO successful, don't be shocked when an FM duplicates your format and steals your audience.
And if they don't, don't be surprised if you go broke.
I, too feel like (quality) AM sounds "better" and I can't fully justify it. The AM signal feels more like a continuous sound, while FM feels like it "flutters," like I'm listening to "frames" of sound instead of a continual stream of audio.
I got the same feeling when Hi-Fi stereo VCRs came along: massive improvement, but it sounded like "FM," whatever that means.
You'd think CDs would bug me since they're "frames" of sound, but a good CD on a good CD player with a good digital to analog converter on a good amp and speaker setup sound breathtaking to me.
FM reminds me a little of the high frequency distortion in compressed audio files, mp3 and the like. It sounds like a "reconstruction" of the sound rather than like the actual sound, to my ears.
No, I don't like a 10 khz rolloff. No, I don't like high noise floors. When it's clean, though... I like AM better.