I play MP3's just fine through my AD516 with the AHI driver. Then again I don't think that driver makes use of any of the 516's advanced hardware, and is just relying on the '040 for decompression. And that is just a damned shame. Be nice if there were more support for original Amiga equipment, and not having to rely on USB, etc. 
This would require a dedicated decoder driver/plugin, similar to MASPlayer, and players must have dedicated support for such plugins. Then Amiga replayers are discontinued what makes getting any support even more difficult...
If the CPU decoding was fast enough you would not even have to consider using such things...
