As others have said, it's a supply and demand issue. Demand is "venues", primarily clubs and bars.
The fallacy is that supply is "bands", and that if bands would simply agree to not play for less than "X", clubs would pay "X" to bands. And thus, bands agreeing to work for "less than X" hurt their brothers and sisters.
Fact is, though, that the supply is "entertainment" (and "draw"). Much of which can be had for far less than "X".
This includes:
DJ's
Karaoke
Duo's, trios, and solo musicians (often with bandinabox accompaniment)
Games
etc etc
At one point, live music by a full band was a big draw.
As someone else said, the issue is as much with an audience that will pay $15 cover for a "Celebrity DJ" but won't pay a $5 cover to see a local band.
While we're complaining, how about movie and sports stars who start bands and get big bucks and international notice simply because they're famous?
Grumble, whine, piss, moan...