You certainly are converting the analog signal to samples, then it's being reconverted to analog at the other end. And yeah, that's a lot of pointless work going on in there if you're worried more about the best sound than the convenience of using the computer that's already in the room.
Does quality suffer in an appreciable way? Just like with analog equipment, there is good stuff and not-so-good stuff, and every piece of equipment in the chain matters.
Same question: does quality suffer in an appreciable way? You're asking on a forum if you can hear a difference. Don't ask here, consult your ears instead. Only they know what really makes them happy, and many ears are happier with far less elaborate equipment than the people who make and sell it would like us to believe. Only spend the big bucks on specialty hardware if you need to impress your friends, or truly can hear things that are beyond the average human capability (about half of us can't).