The problem with buying an inexpensive guitar is mostly psychological. Do you really want to pay for a $200 setup on a $100 guitar? People don't and so they end up learning on a guitar that could be so much better for a small investment.
Tom Morello of Rage Against the Machine fame is well known for doing amazing things with budget tools[2].
https://www.youtube.com/watch?v=wcBEOcPtlYk
It's almost entirely EQ and distortion, applied in various orders (the exact signal chain matters, because EQ after distortion sounds different than distortion after EQ). By getting this right you can simulate any tube amp tone with solid state to a high degree of accuracy.
The heads aren't so cheap these days, but not particularly hard to come by
Needless to say, this is probably not a thing anybody is looking for.
That is because the new cheap guitars can be (depending on the manufacturer) really good nowadays. I have to admit I felt a bit of envy with my family member, because during my youth this was a fucking struggle, with weird Squires that had all kind of problems and twisty necks and whatnot.
Of course the cheap guitar doesn't add the placebo effect of having a guitar with the real Fender logo to it. And if you're struggling to get out good sounds you might feel that the only thing that will make you sound better is that Fender logo. Probably everybody goes through that stage at some point during their instrument-playing. But as of now I am good enough of a guitar/bass player that I stopped caring about brands for the most part. There is big brands with shit products and small brands with good stuff. Brands do not matter nearly as much as the press or guitar snobs say.
Yes, exactly. Does a guitar that costs €1200 sound and (equally importantly) feel even better? Yes, in my opinion - but with modern instruments, diminishing returns do set in quite quickly.
I noted this comment from the guy in the article: "All the guitars they made after [1964] were junk.” Utter nonsense. I can't stand that kind of boomer gatekeeping.