atx,
It seems to me that you may be confusing intrinsic value, extrinsic value, and consumer perceived value. While these values are all related, they are not a one-to-one correlation. Before I dive too far into economic theory, let's apply this to the SR71.
Ray has priced his product offering at $400. That offering sits at a certain point on the supply and demand curve where, in this case, the pricing is NOT market determined, but rather supplier determined. In a perfect market system, all buyers have perfect information, and a seller would just place his/her product onto the marketplace and the determined economic value would be the true "fair market value" -- a fairly determined extrinsic value -- this is obviously not the case. eBay comes close, but doesn't make it because premiums and discounts are randomly determined depending on the relative access to information that a pool of bidders have about the product at the time of the auction.
The intrinsic value of an object available to the market for purchase takes on more attributes than, in this case, "sound quality". You are right in saying the perceived sound quality may be influenced by product pricing, but the degree and amount of correlation may not be as strong as you are stating. I think that's where people are taking exception to your statement. To some people, "sound quality" is completely uncorrelated to pricing after a purchase has been made. Take a vintage Gibson Les Paul guitar. Though upgrades have occurred to the product where new products are cheaper and more precisely manufacturered, certain vintages and finishes still command a premium on the order of multiples above the pricing for a new market item.
Now, you're getting into perceived value. There is substantial perceived value that people who are interested in purchasing products from Xin receive knowing that he continually improves and upgrades his products while trying to hold down price -- as much as those who value Ray's philosophy of building a high-quality product that does not need upgrading. These are two different intrinsic values that have an undetermined impact on product pricing (unless someone wants to do this for their masters thesis in microeconomics) and have an undetermined impact on the idea of "sound quality".
Your idea of a "rational" consumer is flawed since it requires that all consumers will seek to attain perfect information before making a purchase decision. That's obviously not the case, hence the need for sellers to have a BRAND... i.e. a container to hold the consumer's opinions on a company, product, or service. A perfect example of this are the Apple iPod's, that have been commanding market dominance and a distinct price premium despite the fact that there are equally useful products at the specifications level.
EDIT: Your statement...
[Sound Quality] = f{price}
...is incorrect. Rather, the equation would start like the following...
[perceived Sound Quality] = f{price, user's experience, user's knowledge of audio, user's knowledge of electronics, user's source, user's source material, user's emotional fulfillment for supporting their favorite amp builder, user's emotional satisfaction for purchasing from a small one-man band v. a large company, user's mood on any given day,...}
Obviously, this is not a complete function, but I think you get the idea...
Everything has value, including sound quality!
