Boy, did your original post and question start me thinking. It seems to me that for the ordinary person looking to purchase equipment in order to appreciate music, and not the other way around (nice point, Onemug), there was a great deal of positive change from 1970 to the mid-80s -- partly thanks to the pressure brought to bear on manufacturers by the likes of Stereo Review and Julian Hirsch. During that period, the sound reproduction quality of equipment (both electronics and speakers) continuously got better, at least with respect to what you call "mid-fi" equipment -- that is, the stuff most ordinary folks like me bought for their dorm rooms and living rooms. The arrival of the Compact Disc was the crowning achievement of that era -- virtually no noise, more convenience, and less opportunity for damage or wear. But it seems to me that from the mid-80s until the arrival of iTunes and the iPod, nothing much changed.
For true hi-fi, I think there has also been improvement -- I still have an Apt Holman preamp, which at the time was considered an excellent product -- but even after having it completely rehabilitated, it doesn't sound as good as the modern preamps I own. But I think the improvement is less marked than with mid-fi, and I also agree with Onemug that we see the law of diminishing returns working in spades.
Today if I pick up one of the trade magazines, all any of them want to talk about is equipment most folks can't afford -- and to hear the magazines tell it, the more zeros there are in the price tag, the better the equipment is (I would give my eyeteeth to pick up The Absolute Sound some day and read "Yes, the Gargantua 2500 is a wonderful amp, but it costs $40,000 -- only an idiot would pay that when the Cambridge Audio 840w delivers 95% of the performance, and more convenience and adaptability, at 6% of the price"). I recently went to a dealer event and listened to a rig costing over $200,000.00 total, with the manufacturers reps present, and was completely unimpressed. If anything, it sounded worse, not better, than the equipment in my listening room.
So my take is that while there has been definite improvement in features, and convenience, and SOME improvement in sound with hi-fi, it hasn't been enough to make old Quads, or Maggies, or ARC SP-9s, or CJ 2250s, or any other older, quality equipment obsolete, so long as it still functions properly.
What's the moral? I'm not sure, except maybe that once the equipment got to the point where it reproduces the recorded sound clearly and cleanly, without significant distortion or noise, that the further "improvements" in sound quality have largely been illusory -- or at least not worth what the manufacturers now seem to want to charge for them.
