Let’s say, for a moment, that the universe inserts a rule where significant differences in quality happen at around 2x the price. A use this "rule" using audio as a basis, where 3db is a significant increase in perceived loudness. This 3db increase also requires 2x the power (or, number of speakers) to obtain this goal. Applying this ’rule", to get a significan increase in SQ from, say, a $300 speaker, we’ll need to be at $600. All is going well enough in this scenario until, we reach serious money. A $30k speaker now requires a $60k investment (and, bank loan?) to obtain.
You might find this rule "silly" and can think of (valid) examples of why this isn’t true. But, the point being, when you start throwing big dollars at an audio system, the upgrades can be quite expensive. And, yes, worth every penny.
The problem is that the way you present the diminishing returns observation ( it is not really a law) you present it as a MERE objective computation... But this "law" is related not only to objective design improvement with time but also to the subjective status of the customer who must be ready and knowleadgeable enough to perceive the change and accept it... This border separating objective design improvement and the listener status imply at the frontier near this border a MINIMUM ACOUSTIC SATISFACTION THRESHOLD or M.A.S.T. related to each acoustic factors to be objectively improved and to be subjectively perceived as such...
The M.A.S.T. is different for each of us not only in subjective value but in his objective perception ... Acoustic factors for their determination and evaluation are related not only to our history in audio, in our audition personal learning and history, in our musical education , they are related to technical gear design imptovement but also to many embeddings controls in the mechanical, electrical and especially room acoustical dimensions and also to psycho-acoustics basic knowledge ...
Then to understand how work the diminishing return "law" we must be able to perceive the M.A.S.T. and learn how to CONTROL IT AT WILL and not only go with upgrades spree... ....Because half the times at least, upgrades are meaningless, void of any oriented acoustic improvement and induced by marketing...In the opposite learning how to know ourself and our auditory history by learning acoustics basic concepts ( no it is more than room acoustic here ) and experimenting with low cost mechanical , electrical and acoustical experiments and simple devices, will make us able to know how to stop upgrading without being frustrated by the soundfield qualities.... We will had learn how to reach the minimal acoustic satisfaction threshold but minimizing our money expanse ...
Each acoustic factors are related for each system room /ears/brain ...This relation is in some orders because each factors are directly or indirectly related, then we must learn what to do to improve the most important one and to which level because too much may be a defect... This is why the Diminishing returns relation between the subjective perception of an improvement and the objective design improvement cannot make sense without the minimal acoustic satisfaction threshold for each acoustic factors separetely and together in a balance way...
This is why my motto in audio is :
Never upgrade anything BEFORE embedding all components rightfully in the three working dimensions...
And psycho-acoustics science rule the gear component working first and last not the reverse...
Then opposing "music lover" to audiophile as the one ready and obsessed by sound quality to the point of throwing money without ever stopping , make no sense... This opposition is preposterous and meaningless... Learning is the rule not expanse... We must be music and acoustic lover not only gear focus lover...
Another forgotten important point is that there is no relation between the state of a system well embedded in his working dimensions before and after... No comparison at all ... Not knowing how to embed a system nor even knowing that a system must be embedded rightfully to be evaluated, most people had no other solution than buying costlier cables and costlier components to feel less frustrated...
