Really? Because the most common place I've seen this logic break down, is the bizarre habit of people to derive some sort of status and self-worth from using an unpopular product. And to then to vehemently defend that choice in the face of all evidence to the contrary.

No "artisanal" product, from food to cosmetics to clothing and furniture is ever worth it unless value-for-money (and money in general) is of no significance to you. But people buy them.

I really can't go trough every product class, but take furniture as a painfully obvious example. The amount of money you'd have to spend to get furniture of a similar quality to IKEA is mind-boggling. Trust me, I've done it. Yet I know of people in Sweden who put considerable effort in acquiring second-hand furniture because IKEA is somehow beneath them.

Again, there situations where economies of scale don't exist and situations where a business may not be interested in selling a cheaper or superior product. But they are rarer than we'd like to admit.