A professional studio will have advantages not available to a typical basement artist. The electronic parts of the path from performer to recording have gotten quite cheap, but except when using all-electronic instruments there's still an acoustic part that isn't so cheap. A performer in a recording studio generally isn't going to have takes ruined by unwanted outside sounds. Someone recording in his basement, on the other hand, often will. Of course, given a choice between having to do a few extra takes to get a good one, versus having to spend thousands of dollars for a studio, many people will opt for the former.
Also, I wonder what fraction of the people who listen to music these days really care what it sounds like? Someone listening to music under ideal conditions could easily tell the difference between a recording produced on $750 worth of equipment in someone's basement and one produced on $750,000 worth of equipment in a studio. Someone listening to a 128kbps MP3 with cheap headphones on a noisy subway, however, probably couldn't. Which type of person represents more of the market share?
The quality of musical recordings has been going down for several decades.
I listened to an old Paul McCartney/Wings album (on CD) a while back. The quality of the recording was shocking compared to the recording quality going out today (and I’m talking about mainstream commercial albums of today.) In other words, even commercial recording companies are scrimping on quality.
I can remember having a discussion with someone years ago who swore that the mp3 format would never catch on, because the quality was soo much poorer than a CD. Boy, was he wrong.
Look at the equipment people are using to listen to music with today. An ipod with earplugs. Even the BEST earplugs are sub-standard compared to full blown headphones (which pale compared to a full blown stereo system.)
Most people don’t buy music because of its recording quality, they buy it because they like the music. A basement recording artists today can put out a recording that is “good enough” quality wise to satisfy 90%+ of most people.
Also consider the musical style. If you like the symphony and opera, recording quality will be higher on your scale. How important is recording quality to the typical death-metal fan? Good enough is about all that is required.
To make a long story short, I’ve heard people argue “quality, quality” for a couple of decades, but I just don’t see a huge market for quality. Heck, you don’t even see the record companies pushing the fact that the sound off a CD is better than the sound of an mp3 (which they would be if they thought it would make any difference.)
Who buys music? I don’t know about today, but in the ‘70s and ‘80s the typical record buyer was a male between 14 and 21 (young men bought way more records than women.)