I don't have DAC specs for the 950 handy, but my understanding is that the two are a very close match sonically.

Why can they sell the 970 for $200 less than the 950 originally sold for? Well, first, keep in mind that the 950 was selling for $700 when it was discontinued in the spring or summer of 2005, putting it at the same price point that the 970 stepped into when it arrived in late 2005. The 970 also offers a slightly different feature set. Sure, it has a number of pretty important things that the 950 lacked (transcoding of composite and s-video to component, DVI video switching, an extra component input, front inputs, a headphone jack, and a more modern DSP chip that allows it to offer features like PLIIx and AV sync adjustment), but it also offers a less expensive remote than the 950 had and doesn't include the 950's second zone capability. It probably doesn't hurt that some of the development costs associated with the 970 were shared with the 1070 (since the 970 is essentially a 1070 with the amps removed), but I don't know how significant that actually turns out to be compared to the 950 (which didn't have a receiver cousin but was used by Eastech as a platform for developing "clone" products).

Of course, there's always one other explanation - the Outlaws are crazy rebels who want to push the boundaries of performance and value as far as they can - but that's not really as quantifiable as my other reasons.