The law of diminshing returns?

My sense of it is that our hobby is far too profound to be limited by a phrase which applies more to objects evaluated in isolation than the entirety of relationships that an audio system is. 

It is precisely because the principle of diminishing return is not about the gear and the price "per se" alone...

 This principle (not a law) is about the relation between the subjective/objective  perceived  acoustics factors of the system /room and of our own hearing positrive or negative biases,  and the subjective/objective contribution of the gear pieces design price to the experience.

This relation cannot be avoided and at some point we loose by investing more money on the gear  without investing more on acoustics material aspects and investing time in our hearing education.

Without  the necessary acoustics education there is inevitably very swift diminishing returns... We  may buy unnecessary piece of gear or the wtong one at the wrong price..

 As an example :  There is no relation between a system /room before and after his optimization... Then if the optimization is not well done the diminishing returns may occur with a gear upgrade  and arrived too soon very rapidly.

If we learn how to optimize a system/room now we are in a better position to upgrade it without too much immediate diminishing returns, because we had increase our actual system working peak and our own hearing knowledge  and acoustics concept luggage ...

P.T. Barnum was right.

I will admit that I am not what I think is a true audiophile. The belief that a power cord sounds dramatically different, but that difference is too subtle for those less sophisticate than the princess and the pea must be a bicycle tire pump to the self-esteem has far passed returns that diminish into undetectable for me. 

There is the story, known to some here, of a man who tied up his family building the ultimate sound system and listening room. He spent years and over one million dollars building it. when he finally finished, this large acoustically advanced room had only one sweet spot and one listening chair. He also was diagnosed with ALS when he finished and lived only one year to listen to his perfect system. 

I think it is possible to go too far with this, or any other hobby. I designed and built my own amplifier and was satisfied several years ago. Now, I listen to the performances of compositions that appeal to me. 

@kevn + I've based my many decades of building systems on this exact thing. Nearly countless incremental improvements are possible, while each in isolation may conform to the law of diminishing returns, taken in totality they provide much more value, may even be transcendent.

The real affliction many audiophiles are cursed with is the 'law of diminishing appreciation.' How many times have you upgraded a component and stayed up listening to music all night. You sit there in amazement proclaiming that you have reached the end of the tunnel. You tell people that you're finally done with upgrading your system. It just can't get any better than this, right?

Yet, a year or two later (or a shorter period for some), the appreciation diminishes. Your brain adjusts to the new normal. What thrilled you at first becomes mundane. Your brain is now craving something different, something better. You enter the 'component lust' phase once again and incessantly start browsing youtube audio reviews, used gear market, dealer websites, etc. Then some of us buy something more expensive, something 'better' as per your brain. Others with limited budgets embark on the 'tweaks' journey. What was 'perfection' not too long ago suddenly has all these deficiencies that can only be fixed via footers, cables, shiny stones, Helmholtz resonators, magic pixie dust, I mean contact enhancers, etc. etc.

You stay up all night and make the same assertions all over again al'a Steve Huff (endgame component). Rinse, repeat, rinse, repeat.