At the end of the day, there will always be a balance. Some clients will take advantage of higher quality photography to gain an advantage over competitors, which will force the competitors to keep up, to an extent. Where the balance lies will depend partly on the bean counters, and that's why we are suffering at the moment.
Estonia has always been about price over quality, but it keeps getting worse. Some recent examples:
1) A hotel chain which owns 70 buildings in Estonia wanted me to shoot their newest hotel building, freshly renovated. They said they appreciated the value of good photography when it came to clients selecting a hotel online etc but then tried to tell me that they could only afford $120 for the whole job. Hmm, even if they are making only 5% per annum return on the capital investment of the buildings, they have an income of $35 million or so. What a joke... I told them that they were offering less than it would cost just to hire my equipment for the day and that I would be happy to work with them another day when they were offering a realistic budget. I heard that they found a photojournalist with zero lighting gear to do it. What they did makes no sense. If higher quality photos would entice just one more group booking over the next few years, they would pay off the investment.
2) A photographer friend who does weddings pays her assistant $20 per hour to assist at the weddings. She just found out that he is offering a special deal online to shoot an entire wedding for $20. She got so mad at him for doing that - not because he's not allowed to promote his own business, but because he was committing financial suicide and dragging the whole industry down at the same time. I agree with her! He thinks he's making money but he isn't even covering the depreciation on a decent camera, never mind making a profit.
3) I was just asked to pitch for a spring/summer clothing campaign to be shot in November (usage in 6 countries) but was told the maximum budget would be $9,500, preferably lower. I tried to tell them that flying 2 top level models over to Estonia would already blow their budget, before we even started shooting, never mind flying them and a whole team to hotter weather somewhere. So I pitched an idea which was 100% over budget, which is what I thought it would take to achieve a minimum standard. I don't expect to win that one.
One poster here advised us to 'keep shooting quality and you'll win in the end'. Problem with that comes when the client budgets don't even cover a minimum standard of production.