Diminishing returns principles exist with almost everything you can think of - cars, wine, food, clothing, women, HiFi ; : :
And the value of incremental gains is exactly that -"value". A person's "value" is very subjective. Some people will value $100 jeans over $10 ones, whilst others will say that my 10 pairs will outlast/outwear your designer jeans by years. I disagree with the statement that headphone value stops where good speakers start, headphones are totally different to speakers, different experience and different purpose. If you are looking from a value for money perspective as a part of the equation as to when headphones are no longer worth the money, then for many that will start very low. You can get a lot of enjoyment out of a PX100 or KSC 75 etc, and diminishing returns cuts in pretty fast. For me I am happy with both my ED8s and T1s, but lets not kid ourselves that they are anywhere near 4X or 5X better than HD650, DT880 etc or 15-20 better than PX100.
EDIT: First reply to this thread from KingStyles summed it up perfectly.-
"Basically, when you decide that the price dosent justify the performance gained. That will be different for everyone. Nothing more to it. ""
Edited by Kernmac - 5/19/11 at 11:07pm