If you're looking at it from a economic standpoint, to be considered irrational, the tradeoff between the value of time vs the cost of hiring a professional would have to assume that the value of the time is greater than the value of the professional.
I always hear this compared to "what is your hourly rate in your job" or "my time is worth more than that", but I think for most people this just isn't a fair comparison. Just because I can spend 10 hours painting my room and I make $x/hour and it would cost <$x to pay a professional, does not mean I would be able to actually generate an _incremental_ $x per hour by not painting and hiring the professional.
For most people on a salary (where your pay is fixed no matter how much time you put in), their time outside of the job is, in a very real sense from an economic standpoint, valueless, and it would be perfectly rational to spend that time yourself, no matter how cheaply a professional could do it.
If you're looking at it from a economic standpoint, to be considered irrational, the tradeoff between the value of time vs the cost of hiring a professional would have to assume that the value of the time is greater than the value of the professional.
For what it’s worth, I don’t think we are really disagreeing much.
An amateur painter will often spend far more time than any reasonable estimation of the market value of that job would justify. Part of this is lack of efficiency and experience, but another part is doing things with sharply diminishing returns. For example, you might apply expensive techniques to inexpensive materials, in a way that would not make for a viable business.
Put it another way - amateurs can easily arrive at a finished job (of painting, in this case) that they would never be able to convince themselves to pay market rate for. This is irrational in certain restricted senses.
For what it's worth I don't believe that "lemons market" is accurate for painters in general, but I'm guessing there is a segment of it that meets your description.