I ABSOLUTELY CANNOT FOR THE LIFE OF ME successfully ABX flac v 192kbps mp3, or even 128 for that matter! (I'm not making this up to make you feel better or anything, I just can't friggin do it bro).
But I didn't let that stop me from jumping into high end audio, because to me, it's not about hearing moar details, it's about giving a different presentation of the sounds that ARE there, or, what's audible to my tin ears hehe.
And hey, even with my mighty Stax O2's, I still can't successfully ABX lossless and 128kbs mp3. But I definitely prefer the way music sounds through them, regardless of whether there is more detail or not.
Don't forget, the whole purpose of mp3 compression is to be able to remove as much data as possible, without losing transparency to the lossless copy, so there's nothing wrong with not being able to ABX the difference.
Anyway, diminishing returns are a personal thing, because if nothing else but a >$3000 setup can keep you happy, then isn't it 'worth it' to get there at the end of the day?
So maybe that is the point of diminishing returns. Then again, I was once perfectly happy with the ~$150 AD700's =P.