Am I missing something here?

Also, what kind of guitar are you using? I find that the noise gate knob is set too high on most if not all factory rigs, and it definitely takes off a bit of definition and high end.

For more amp in the room sound you can help things along either by using a real amp cab as your output, or to at least give it some air you may want to raise the space setting on the KPA.

The trouble is you're going to always have the nagging feeling that its not right or is digital sounding until you actually go ahead and do a profile of an amp yourself and see just how accurately it does that (and just how your amp sounds when recorded and played back through the same system).