Of course one could insert the (rather) obscure reference to Adam Smith and the invisible hand (everyone pursuing their own self interests...) - but it really is really simple economics.
As an increased supply (existing bands, new bands and/or DJ's) enters the market - AND demand remains constant (the consumption of music), prices drop. The bad news is that as phones/pads make it easier for music to be presented (i.e. DJ's), prices for DJ's will continue to drop. Then add in new bands trying to get started, and prices drop further. FWIW, I'm not surprised that Alexa, Dot or other spyware infused or music streaming device isn't already a DJ - now actually, that would be hilarious - a DJ streaming music via a phone/pad is put out of business with an automaton device. But I digress.
The GOOD news is that performers putting out awesome music, coupled with lights, band engagement with the crowd, etc. is the marginal utility (the utility on the margin of the new band that doesn't have lights, crowd engagement, play good music, etc.) will actually get more people to pay MORE for their services than for the inferior quality of the newbie band.
The adage that practice pays off is appropriate here too. People (bar owners, wedding parties, or just concert goers) WILL pay for the higher marginal utility of a good band.
Yes, it does sort of suck that newbie bands will take some of the air out of the market - and rather good bands will suffer in the short run by not earning enough to stay in the game - but that is the way that market economics work.
FWIW, I played for free in my church for almost 10 years and (at the same time) subbed for some pretty terrific players when they had other commitments and called me. I ended up making a bit of cash on the side while I worked a very full time job in the corporate world - and I also made a bit of a name for myself as a sub player (wide repertoire, not an a$$, on-time, no attitude, etc) and was called pretty often... Now this was 10-15 years ago and most of the bands that I played with are now gone and are only remembered as a wisp of unimportant history. But they are fond memories for me. Hopefully I touched a few good souls too.
Fast forward to now and I'm playing for me, though I do get together with friends (who in their own right are down right terrific players) - but I don't even get close to deluding myself that I am willing to put in the time/effort to play out again. Even now with our kids grown - one in and one now out of college - I still don't have the time to play out full time, but I still do play (quite a bit actually). It's now for me being a better musician and playing good music with other musicians than it is for those bystanders that happen to be at the jam.
Oh and one more thing. Yes, I'm married (28 years) and my wife plays a good CD player but not an instrument - (nor any sort of iPod or other digital music device). She comes with me partly to support my musician habit, but primarily is there to listen to some really good music - oh and she didn't have to pay a cover charge either. Lastly, we do see local musicians all the time (1-2 times/month) and yes, we pay the cover but don't drink a lot to keep it affordable and we'll keep doing the same for those that do it for the music - and not necessarily for the economic benefit...
Anyway, sorry for the rant. Yes, it really is simple economics. Yes, it sucks. (And) Yes, that is how the market works...
John