At the end of the day though, if the song is crap, it doesn’t matter how amazing the recording might sound.

It’s fun to bend the formula sometimes; to shake up a genre, but you still want to give the listener enough of what’s expected to feel grounded, and above all, hear and respond to the song without fighting through an overly clever arrangement.

Budgets are definitely down these days, and it’s become more of a buyer's market for the services of producers and engineers. There have always been great records made on a shoestring though. I believe that high quality artists and songs will surface regardless of the money being tighter. Some of the decisions made by record companies in this climate can do more harm than good unfortunately. A lot of great stuff gets shelved for the wrong reasons.
As for the quality of bit-rate compression and playback devices, I fell in love with pop music as a kid listening to the radio on a shitty transistor. I don’t think it’s as much of an issue as some people do.

Live performance, especially for more established artists, is an important way to make real money as record sales have dropped. Owning a recording is about living with the song, having it as part of your personal collection, and sharing it with others; buying into the artist, and looking forward to their next release. Fan culture is still important to everyone making music as a profession. Records get people to the shows, and shows get people buying records. That hasn’t changed much.