The fallacy is in the assumption that all the additional new production will have the same quality as the low volume production. It's required to justify the argument. In a perfect world, no bass would ever need a setup either.
It's not an assumption, because you're missing hard cold facts about manufacturing and operations.
First, is economies of scale. You can buy 1000 fingerboards for a lot less than you can buy one or two. Second is specialization. If you recruit the right type of person for a set up position, you can train the guy by a master luthier. If he's setting up 8 of these a day, in two months he's done 320 setups and he's quite good at it on the two models the company produces. He learns to do it better, and fast, learning to keep tools he uses regularly close to him, dealing with the same set of problems regularly. Third is the learning curve. A company that makes 5000 uprights a year has lots of opportunities to get really good at it , particularly if they only make a couple models to simply production. With people eating, sleeping and drinking nothing but these two models, they can get the process down to a science. Throw quality improvement techniques in there, and supplier certification/quality programs it wouldn't surprise me if you could create some killer quality uprights.
I believe, that with experience, companies can produce good quality instruments at really cheap prices, even in the upright arena -- but only if they have the volume.
When I was building instruments a few years ago, I got rid of the fear of taking necks off instruments, uninstalling tuners, adjusting truss rods, retro-routing pickup cavities in a manufactured bass -- all the stuff that scares the average Joe like I was previously. I had a lot of basses of my own and took them apart for various reasons (like transporting them on a trip in my suitcase), and I saw the quality of mass produced basses -- good neck pockets, killer finishes, tight tuner installation, great pickups, good fretwork.
And the stuff that was greater quality in my own instruments didn't seem to matter much sonically. Example, my luthier/trainer showed me how to build a bolt on bass that had a neck joint so strong you can hold up the bass with the neck inserted into the pocket, parallel to the floor, and have the body stay in the neck even though the neck screws weren't installed. And this was with the body facing upward. The tightness of the fit held the neck in place, it was that precise. But did that matter sonically and functionally as long as the neck fit snugly in the pocket and had good screws? No! It makes great press for when you are trying to sell your boutique bass services, but functionally and sonically, it made no difference compared to m looser fitting neck pockets on other manufactured instruments in the $400 to $800 range -- basses that couldn't pass the test the luthier had me do on my own instruments I built.
Everyone carries on about high mass bridges as the be-all end all of tone and sustain (Badass bass bridges, for example). I know because I was on that plan and bought a pile of them. Then an engineer on Youtube did a test where he installed a low mass bridge on a bass, and then measured the length of the sustain using a meter. Then he installed a high mass bridge and did the same thing. The sustain was the same with either bridge.
So, I now consider brand loyalty and all the mystique about building as mere hype. Even George Harrison and Pat Metheny said its not the price, it's how they are set up and their native tone that matters. And you can get good tone with all kinds of different materials.
Even suppliers can be worked with to produce good quality. One trick I learned was to seek out suppliers that are small. Say they have an annual sales volume of $1 M per year. You come to them willing to commit 85% of your fingerboard volume with them over X years, increasing their sales by 50% per year. When you say jump, they will say "how high?" because you are their biggest customer and will work with you to get you the best stuff they can.
Again, I think prices are high for uprights due to the cost of shipping, and the perception that there is something mysterious about the construction. No one in that industry wants to pee in the pool. I think the rarity of 200 year old basses, and the tendency for basses to open up and sound better with time elevates the price of quality low-end basses. The prices of those older basses creates an anchor point for the lower prices upright basses, like a halo effect.
