what is *good* singing, anyway?
Interesting thread.
I'm glad that Kirk Cobain, Dave Matthews, Lou Reed, and Bob Dylan have all been brought up, because therein lies a distinction. Personally, I like works by all of these guys, but would not call any of them great singers in the classical or trained sense. However, I like all of their styles. Their singing is as much a part of the success of their sound as any of their playing. Singing flat or sharp or even so far out of the ballpark it's a stretch to call it singing works sometimes, especially in rock and roll. Not that we always hear these guys completely dry, but much of what conservatives or traditionalists may call "bad singing" is left in the finished product. Granted this usually doesn't have "mass" appeal needed by business to make back their millions invested in the product.
So, I'll go out on a limb, and say that most of us seem to agree that it's not really the "good" or "bad" singing that is irritating, it's the correction process that is used to dupe consumers. A lot of Pop music has been manufactured to match good looks or style with a "clean" sound. I guess it's just easier to fix the sound than fix someone's looks.
I don't think that singers got worse after the 70s or the musicianship has fallen off, but appearance became MUCH more important in the 80s when marketing music. For this reason, they began to manufacture music for looks, not the other way around. There are still great musicians out there and there are also a lot of great unpolished bands putting out albums as well, but you won't see them at the top of the charts or on TV if they don't look good (exceptions occur), mainly because they don't get the bankroll they need to produce chart topping results. We all know that you can be great, but you can't get a #1 without a lot of money and support, usually provided by major labels. Especially now when radio is all but an in house marketing arm of the labels.
But as to why things sound different live, I think that most of the reasons have been pointed out. As far as performances go, the difference in what you hear, mostly from the monitors, can make a huge difference. I'm sure many here have played shows where you just went off pure memorization because you couldn't hear anything else.