I don't think there is any such thing as "sin" when it comes to audio/music - choice is totally up to the person putting together their system according to their needs and their ears. Unfortunately, some people who consider themselves audiophiles seem to feel compelled to look down their noses at others when they don't agree with the choices made.
Since I last posted in this thread, I have separated out my 2-channel system from my HT system - they still share the same space but no longer share the same speakers or sources. I bought a used Denon 3910 DVD/SACD/DVD-A player from another Audiogon member for my HT system and love it. The 3910 is a bit out of your price range but other Denons might be a good fit for you. Also, for comparatively very little money you might consider the Oppo DV971 - it has gotten very good reviews and at only approx $200 you might be able to afford the CD player you want, too! http://www.audioholics.com/productreviews/avhardware/oppoDV971Hdvdplayer1.php
I like having a separate redbook CD player, but quite understand making compromises until the money is available.
Holly