Think of it like a painting.
You're a fantastic painter - Michaelangelo incarnate - and you've got this postcard of the Sistine Chapel that's really awesome, so you figure - "Sweet, I'll paint the Sistine Chapel design on my ceiling - it'll be wicked." ... only all you've got to go on is that little postcard.
Now, since you're a fantastic artist, you can do a pretty good job, but you're obviously not going to get it just right, because you don't know what the whole sistine chapel really looks like; let's face it, postcards can only get so detailed, your vision is only so good, etc. So yes, you can blow it up to the size of your ceiling, but at most, it will be as detailed as that little postcard; everything else will just be filler.
As has been said above, lossless is only meant to work directly from CDs or true AIFFs.