There is a huge middle ground between "static image with another sliding static image" and "1 year of drawing per 4 second Ghibli masterpiece". From your comment is almost looks like you're suggesting that you have to choose either one or the other, but that is of course not true.

I bet that a good animator could make a really impressive 4-second scene if they were given a month, instead of a year. Possibly even if they were given a day.

So if we assume that there is not a binary "cheap animation vs masterpiece" but rather a sort of spectrum between the two, then the question is: at what point do enough people stop seeing the difference, that it makes economic sense to stay at that level, if the goal is to create as much high-quality content as possible?

Yes, that the current trend in the western world. Money is all that matters. There's only lowest accepted quality. Anything above that is a waste of money, profits that are lost. Nobody wants masterpieces. There is no market for that.

That lowest-accepted quality also declines over time, as generations after generations of people become used to rock-bottom quality. In the end, there's only slop and AI will make the cheapest slop ever. Welcome to a brave new world. We don't even need people anymore. They're too expensive.