Few customers care that much about the quality of a pastry. A marginal decrease in quality won't result in an appreciable decrease in customers; likewise, a better quality pastry probably won't bring in enough money to cover the better chef.

At least in the USA. Here, most people equate "pastry" with something on the level of Dunkin Donuts, and are oblivious to the quality of something like an Austrian "konditorei".

The restaurant/bakery/etc may take pride in its output, but if the customers don't care in kind (a thing is worth what another is willing to pay for it) then it's unsustainable. Diminishing returns matter.