There are some really great owners out there that really know the hospitality business and they are obviously not fall down chronic drunks. Yet I do seem to notice that many dive bars that start booking bands to pump up the patronage past their 3 or 4 regulars are owned by fools who don't get the music business at all........
Those bars tend to call in a band after their business has been flagging for a while, and somehow expect the band to turn it around. But once they get to that point, it's like calling in a handyman to fix your house after it has already burned to the ground. There's not much you can do with it.
You can call in a top cover band, but they will probably charge you more than your budget will allow, and if they playing at nice rooms, that's where their crowd will probably wait to catch the band. If you can catch your favorite band on Friday at a dive, or Saturday at a fun place, where do you think people will go?
You can call in an average band, but they will probably want money too beyond the budget. But, the average band may give in to play another room. They won't have the draw of a top cover band, but they may still sound good. However, because the bar is empty and the band doesn't have draw they probably won't play there again. Even though IMO, it takes having bands (and good ones at that) for a while at a place before the place gets known for good music and starts to draw. But, the dive bar owner will call it one and done.
They may call in a mediocre band, since it's in their budget. The mediocre band may draw the best because since they don't play out that much, they can get friends and family to watch them for novelty. The dive bar owner loves it, because they have a good night without paying the band and rebooks that band. Unfortunately, they don't repeat their draw, because even friends and family don't want to see a mediocre band all the time. The bar owner is mad because they didn't draw, and scared off the regulars, so the mediocre band gets their shows cancelled. But, since they had success with a mediocre band before, they try again, and again until the place's reputation is worse than before.
So the bar owner determines that having bands is losing proposition, and buys a photo hunt machine for the regulars to play with so they can make an extra $10 a night.
The problem is that even a great band will have a hard time overcoming the difficulties of a dive bar: poor promotion, bad service, bad food, watered down drinks, bad location, lousy atmosphere, etc.
And the addicts that run these businesses are no different than any other addict: They believe that it's always someone else's fault.