Very interesting topic!
As more companies use off-shore building, I can definitely see the trend already happening. How many LTDs do you think ESP sells versus an ESP custom these days?
That being said, I own one 'cheap' guitar, my Agile AL-2800. The tone is great, in my opinion, but it most definitely doe NOT play as well as my kit guitars with Warmoth necks.
Every overseas LTD and Epiphone I've played so far has made me gag.
So, I don't know. I think that for beginners, cheap will rule the ruins. For the rest of us, we are striving for machines what don't get in the way of our artistic endeavours. In essence, we're looking for the "non guitar" guitar: the perfect conduit from imagination to raging half stack or whatever.
If you're able to do that with a cheap guitar, I say more power to you! I've yet to feel that way myself, though.