The "Law" of diminishing return which is not a law but an observation had two faces: a subjective side and an objective side...
The subjective side is related to our own acoustic history and learnings and limits in qualitative discerning power and abilities...
The objective side of this observation reflect the ALWAYS NECESSARY optimal trade-off choices or the non optimal one , introduced in the audio gear system by any components design limits when embedded in a room optimally or not and coupled with other design reflecting other trade-off choices too ...
Most people confuse this two correlated side of a problem with a "law" which anyway is not a law but an observation about the psycho-acoustic subjective factors and the objective audio design factors, they reduce or simplify it for everyone with a negation of the alleged claim that " improving" or "upgrading" ONLY the gear will NECESSARILY improve the acoustic and psycho-acoustic experience, most people reduce and simplify this observation even more when they say that the hypothetical claim about a direct linear link between price and acoustic quality experience is false ...
This observation , called improperly a "law" , is a very astute and true observation of a complex psycho-acoustic problem coupled to acoustic and physical material electronic design ... ...