When I read your first paragraph I thought, "oh, man, here we go, someone who will think he knows what he doesn't yet know." But I was 100% wrong. You have an excellent take on all of this and this was a really good post that points up most of the same things a lot of us have been saying - which is that it's laziness and a lack of vision on the part of bands who can't be bothered to do what it takes to elevate themselves above the mediocrity in the middle.
We could probably argue all day about why there's so much mediocrity, but it seems like that's the end goal for many bands. The supposed rules they work by tell them they should play the same songs as everyone else, wear street clothes on stage, limit their practice time so they don't know the songs well, and remind everyone it's just a hobby so they don't have to care much when things go wrong. And they happily accept getting paid according to what they offer, which is not much, so it's not much.
I’ve said it before and I’ll say it again: most musicians do not want to work that hard. Even the talented ones. That’s why mediocrity dominates for most of the live music scenes everywhere.