I play the guitar, and I've seen the same sort of thing in that world. Few serious musicians will look twice at the bargain brands -- Squier, Samick, Jay Turser, etc. -- unless they're really hard-up for cash. A bargain brand instrument simply doesn't sound as good or as rich as a Fender or a Gibson to the experienced ear; it will probably go out of tune more frequently, and the neck will be more likely to warp; the workmanship will be poor. None of this means that you can't play a brilliant solo on a Samick, only that, at some point, the shortcomings of the instrument will probably get in the way of playing your best. It might be just as good as a Gibson for an average guy who only plays on weekends when he jams with the boys, but it will be inadequate for the serious musician.
Interesting thought... I have played a bit in my time as well. At one time I had a Fender Precision (a '69 I think it was). I also had a US made Strat (the only real Strats ever made), these in addition to several others, some expensive, some cheap. I can appreciate quality as much as anyone, but lets face it... a real musician can play ANYTHING and still sound good (i.e. EVH and his Kramer. NO ONE should be able to do the things he did with a Kramer). I think it is more the person than the tool, though the right tools will certainly help.
I now have an inexpensive guitar, and to be frank with you, I was amazed at how well it played. I was expecting little, and got a whole lot more than I bargained for.
When I first started playing bass, I had an el cheapo no name piece of junk, but it played. I met a fellow at a show who ended up being one of the best musicians I have ever personally known. When we were introduced, he naturally asked me what I played. I was ashamed, but told him anyway. You know what he said? "Cool."
He was/is a much better player than me. But he would play with anyone who loved the music, regardless of their equipment. It was then that I realized that a person can be in a slightly better position than someone else w/o looking down on them. You know, that actually was more of an encouragement to me than a deterent.
Boy. I have single-handedly managed to shred this thread, huh?