Sorry to introduce a dose of reality into an otherwise entertaining rant-fest, but there are a few things to bear in mind.
1. Entry-level, mid-price and high-end products haven't gone away; they've been joined by a group of super-high-end products
2. The prices of some of these product and product categories have risen with inflation, but generally not as much as people expect. An entry-level NAD C315BEE is about 15% less than the index-linked price of the first NAD 3020. The Audio Research SP9's $1,695 price in 1987 was equivalent to $3,093.70 two decades later, which is $98.30 more than the 2007 launch price of the SP17. The 2010 equivalents of my first system would cost me 25% less in index-linked terms today
3. Audio went through its "smaller for cheaper" phase a long time ago. Computer and digital camera price erosion is slowing now, suggesting these markets are maturing just like audio did in the 1970s and 1980s
4. Audio changed in the 2000s. Today, many companies would likely sell exactly the same number of preamplifiers if it made a preamp at $10,000 or $100,000. In many respects, because of the shift in where the money is today, some of these companies would be more likely to sell a preamp for $100,000 than $10,000
5. I'm sure given the chance most manufacturers would rather make 1,000,000 things for $10 and at $1 profit than 100 things for $100,000 and at $10,000 profit, because there's every possibility that you don't get to sell your 100 quota. But the high-volume, low-margin world doesn't seem to apply to audio at this time. Except for streamers, they sell by the lorry-load
The usual cry from the naysayers is that this is new top-strata is killing the audio business. Why? Does the presence of the Bugatti Veyron kill the motor industry? People are struggling to buy automobiles because the economy is tight, not because of the existence of high-end automobiles. And yet, Bugatti's order books are constantly full.
Until recently, much of the traffic in the audio business was built on inexpensive and mid-price audio and video equipment. That all went away after the real estate crash. It's starting to come back, but for the last three years, sales have been largely volume sales of very cheap audio in Wal-mart or similar, or products with sports-car sticker prices with not much in between, even though there are the products to plug that gap. The exceptions are the few still thriving markets for audio (Russia, Singapore, HK, etc) where it's a status-led conspicuous purchase - in those places, high-end dominates. Upwardly mobile young Singaporeans are big fans of saving up for dCS/Jeff Rowland/Cardas/Avalon systems and the like, because they can show their affluence through better products in each of those four company's products, and because it shows respect to the boss, who has a full Scarlatti/Criterion+501s/Clear Beyond/Isis or Sentinel system. And why shouldn't they? The fact that these systems do sound good and work together well helps, of course.