Roger, yes there are changes when you enlarge. As David pointed out, when printing we are not adhering to strict viewing distance criteria. So we are actually viewing prints unequally - if you get my meaning. So this gives the impression that granularity is increasing. It also makes other factors such as sharpness, focus, and depth of field more obvious, especially the errors. So what I casually see on my contacts, can seem quite different in my print.
I also see a loss of contrast in my enlargements - not too bad for b&w because it is so easy to correct, but more pronounced in color. The cause is simply flare - the higher the enlarger head goes, the more flare. This is the great advantage of contact printing, it is the closest you can get to a system without flare.
So I think with the perceived loss of sharpness and increase in granularity (when viewing distance is fixed) as well as changes in contrast that come from enlargements, there is an idea of a loss of quality. Sharpness is easy, just step back. Contrast can also be fixed.
So I guess my question is, how can the information in the film be lost or altered in printing? In an absolute sense, there cannot be a loss. Granularity is transfered in a contact. So to me, the loss must be in the way we perceive it. In my darkroom, I have my nose to the paper; in an exhibition, I am at a healthy distance. Does that mean S. Salgado has fairies printing for him? No, he has aliens projecting mind rays to keep you away from the print. Figuratively speaking.