Not sure I can agree with you. I'll have to measure the signal to noise ratio on some of my sample recordings (see my web site www.pgoelz.com ) but I believe it is MUCH better than 35DB.
The key is the level of the sound you are recording. No, the gain structure is not really adequate for recordings of quiet ambient sounds (although the sample recording of outdoor noises on my web site isn't all that bad). But for just about anything else, I find there to be more than sufficient mic gain and signal to noise ratio.
The mission of my R1 is to record folk music in the field. For that, it is so far doing very well indeed. For some example recordings from my R1, see: http://www.pgoelz.com/edirol_r1_recordings.html