Bob,
The optical issues with large and ultralarge format photography have very little to do with "bending" and distortion except with respect to wide angles. But these issues are mostly solved even with medium format cameras. I mean the Mamiya 43mm rangefinder lens and the Zeiss 38mm Biogon (both for medium format) are essentially "perfect" lenses -- they have similar designs, and they are completely free of distortion. My ultrawide 90mm lens for 4x5 is a truly perfect lens as well. It's only the ridiculously extreme lenses, like Schneider's 47 and 58mm super angulons for 4x5 that have the kind of distortion you describe (but then again the 47mm lens is equivalent to about a 9 or 10mm lens on full frame 35mm or 6mm on APS-C.
The difference with these large formats is that there is a huge circle of confusion, because you basically don't need to enlarge these images at all (or not very much). The 25 or 30-fold enlargement to take a 35mm image to 20x24 inches is matched by a zero-fold enlargement when doing that with a 20x24 inch negative. So the circle of confusion is much much larger with the larger format, which means that you get beautiful, smooth, gradual transitions between in-focus and out-of-focus areas, and a bokeh that is simply jaw-dropping. Furthermore, the larger formats capture detail so much closer to life size that the prints contain detail manifold greater than the resolution limits of human vision, and between that and the long gradual transitions of focus, tone, and color -- they take on incredible 3D qualities. I maintain that there is no small format camera, including the 1DsMarkII, that can produce an 8x10 print that is even comparable to an 8x10 contact print -- they just have to be seen to be believed. That's not a statement about other plusses of a small format SLR, but I think it goes to show that small format camera development just can't outcompete every aspect of larger film formats.
As for the other things, like alternative processes, these are handmade works of art. You can make things that look similar digitally, but again they're not the same -- they don't have the same textural or refractive qualities. But they don't need to. Acrylics and oils and watercolors and pastels are different artistic media, and so are digital techniques and some very old traditional ones. To be sure the flexibility of Photoshop is unequalled -- but that doesn't mean it's better than a 3D gum bichromate where there is 3-dimensional texture to the image. On the other hand, there are some hybrid processes
by which you can take a digital image, print a negative, and use that negative for alternative contact processes like gum bichromates. Pretty cool, and pretty transcendant with respect to this debate!
Some day these silly comparisons will be a thing of the past, and digital enthusiasts will no longer feel the need to predict the demise of film as if it's some rival sports team. They are complementary for many of us, and they should stay that way. I use my DSLR for high volume stuff. I use my Hasselblad for travel and family portraits. I use my 4x5 for architectural and large format color photography. And I use my 8x10 when I want to create the next great American work of art 