You should hear rFactor through my 7.1 system, it sounds nothing like they do on Youtube. You can't really comment on the the quality until you hear it through a proper home cinema system.
But the point is still valid, given the source of sounds used in most of the mods

Some of the original content was very good (the Morgan in GTR2, I think it was, springs to mind - although the audio engine eventually lets that one down, too)
The textures and tones are usually there, but they're often wrong in context (e.g. reverb that shouldn't be there) or have obvious looping artifacts, or are simply badly mixed.
GT5 is guilty of these things, too, except the reverb thing - the sound designers have a knack for making the sounds flat enough that the game's own reverb engine can do all the colouring. Unfortunately, that is a bit lack-lustre at this point; the long-delay, broadband-style reverb you ought to get from distant trees, for example, is missing; but the tunnels are passable.
Generally speaking, there doesn't seem to be enough effort put into listening to the final product, and comparing to the real thing (in person, not via YouTube.) On that same note, I watched the new NFS Shift trailer recently, and thought my headphones were broken. That's taking the "Hollywood" method to the extreme, and hopefully isn't what the game will actually sound like...