I think as a society we have a "fad" facination that shows up in any hobby, sport or passtime. The other thing that seems to happen is when people get to the point where they can afford better then better becomes the standard they measure things by. Go to a forum about astronomy telescopes or Binoculars and check out the FAQs. Much like in these forums entry level to people into astronomy sounds expensive to the beginner. People are just as bad about cell phones, Just look at the lines for Iphones and Droid X phones.
When I first got back into cycling I at least knew to give a LBS a try before I bought a bike. The big box stores had better prices but they didn't know anything about their product nor could they repair them. I took one look at the raod bikes on the top racks and figured someone had misplaced a decimal point on the price. My wife and I suffered sticker shock. My first bike was at the very entry of what some in these forums have suggested should be entry and it was still a lot more than a Big Box store bike. After riding for a year or two with others that had Tarmacs, and Madones, one day I decided a new bike was in order. Suddenly the road bikes on the top rack didn't seem that far out of line.
I don't believe I have seen that many more cyclists than I did a few years ago but I do see more midrange bikes on the road, but that could be because that is the kind of bike I am looking for so that is what I notice.