I still think that all this new home recording gear can be synergistic with proper studios, and actually help proper studios.
10 years ago, mic's and multi-track recorders were expensive enough that I didn't even consider thinking about getting them. So I think that studios got more "we're making a demo" kind of business. It is now possible to make inspiring recordings at home, so musicians are free to explore songs at home and make their own demos. That is very exciting, but isn't necessarily bad for proper studios.
10 years ago, it was also hard to make a demo of a band that just gave you an accurate picture of how a song sounds. At least in my case, we would consider doing a demo in a studio without really exploring songs before-hand in a recording environment - there was just no easy way to do that. A crappy recording on a regular cassette makes a good song sound crappy every time.
Although I am inspired by my home recordings (that's all I'm really after) and am happy with them, I wouldn't make the statement that my stuff wouldn't benefit from a proper studio. That's just not true. I listen to Wilco's Ghost album recorded at Sear Sound, or Daniel Lanois Shine, and that sound is super-inspiring.
It would be great if all this home recording gear raised the level of studio projects for the average band. Rather than going into a studio with little idea of how a song sounds, and getting shaky results - bands can use home recording gear to really explore a song and do pre-production, then go into a proper studio with much more focus, and make much better recordings.
All this home recording gear has also helped lots of people start recording who otherwise wouldn't. Proper students should start to see business from people that just want to take a day to record drums in a great room, etc. This is a new a new market for proper studios.
I think that the big problem right now is the fad of compressing major label records to the point of distortion. The benefit of havng a great room, and great recording equipment, I think, is much less if you are just going to compress the crap out of everything at the end. Anyone can start with home-recorded garbage and then compress the crap out of it to get compressed garbage that has no depth.
And I know that this is unfair, but I link proper studios to this. I see less value in a proper studio when I hear all these compressed, crappy sounding (and very expensive) recordings.
And, from a studio's perspective, I hope that this price war with recording equipment gives you more money for room treatment, or awesome instruments to have on hand, or a better space. There should be no need to lower prices in the long run, there are plenty of things that home recorders don't have and would be willing to pay for.
So, what I am really saying, I guess, is that I encourage all studios to put a stop to this compression war somehow.
There are more people recording now than ever. You have more "leads" than ever. Show everyone how great your stuff can sound. Give us a "buying vision."
Ideally, we (home recorders) will all have songs at some point that we think are great, and the recording is fairly good. Show us how you can make that great song *sound* great as well.
Okay, maybe I've gone off the deep end here....