This. People assume that because it's "compressed" it must sound flatter, less dynamic, or just vaguely worse than uncompressed audio, despite the fact that audio compression specifically uses psychoacoustic models to remove the bits of data that our human ears and brains cannot hear to begin with.
Expectation bias is a helluva drug.
This is correct, although it's not the bass that is limited on vinyl; it's the dynamic range compression (or 'loudness') in general.