There was an article in the NYT about placebo medicine, where people who had fake treatments got well as effectively as those that had the actual operation done. If anything, it shows how much the mind controls the body!
You are right about differences being small. The reason for the arguments is because, over time, we sensitise ourselves to small differences, so we notice them more when listening to equipment. It's the same with everything. For example, the first time we go into a new, large department store, it is overwhelming and we don't know where to find things. But after going there many times, we know the store so well that we notice even small changes in the placement of products. Another example: A friend of mine drew part of The Lion King. While it looks like a regular cartoon to us, to her, she can watch it and other cartoons drawn around that time and tell you who at what point drew the frames. She is extremely over-sensitised to tiny subtleties (and it ruined her appreciation of animation, sadly).
As for ridiculous misconceptions, they are rife in everything, including science. As much as people who buy expensive equipment are accused of justifying their purchases, people who refuse to buy expensive equipment seem to do the same. I say screw that: Buy what you want and don't buy what you don't want and be happy. Jason and Mike are making what makes them and their customers happy.
I disagree with the conclusion that you drew from placebo studies. The fact that a sugar pill can give similar improvement as X drug demonstrates that the perception of treatment is what is causing people to report feeling better. The actual pill (whether sugar or real) is irrelevant. This goes to show how far our minds are influenced by biased perceptions/impressions over objective fact.
A similar situation occurs in audiophile settings when someone hands you "legit" audiophile gear to test out. You report the sound being better because you already have that expectation bias in mind. Just like when you receive fake treatment, you expect to feel better, so you report feeling better... receiving 'audiophile-grade' equipment without being blinded, you expect the sound to improve, so you report the sound improving.
The price of equipment has no correlation to sound quality, but price is one of the confounding variables that influence people's perceptions. There are many other confounding variables such as brand name, looks, build quality, etc that have no correlation to actual sonic performances.
The point of blind ABx testing is simply to remove all biases/expectations to ensure an accurate comparison! I don't understand how there can be any debate about its usefulness. If you can't hear a difference in a blind test, but you can hear the difference non-blinded... it is very suggestive that the perceived sonic difference is due to confounding variables.
I agree that you should just buy what you like. However, many people around here peddle their personal opinions and preferences like facts without realizing that many of these impressions/small differences may be unnoticeable or non-existent in a blind test. People argue over all these different silly things around these forums, because people here think that their subjective experience equals the objective truth. There is nothing wrong with personal impressions, but without any underlying system for measuring sonic performance or rating sonic qualities... there is no way for other people to relate!
"X headphones are very detailed. Y amp is so transparent." There is never any reference point! And even when there is a comparison, the fact that it is not blinded introduces so many confounding variables that it is hard to take the results seriously. There is a reason that medicine requires studies to be double-blinded or else the results are disregarded!!
Websites like head-fi catering to audiophile enthusiasts are seriously lacking in any real scientific research or objective data, which sadly turns them into nothing more than a vehicle for advertisements & personal endorsements. I think blind ABx testing and a more objective approach to the actual sonic changes between different gear would be greatly beneficial to this hobby.