The guitarist I play with insists on turning up his volume throughout the song, even though we use an electric drumkit, and all have volume knobs, so it COULD be kept down, but everyone has to turn up to join him. I just bring my isolation headphones and do decently. I'm not sure how everyone else handles it, as we practice in a really tiny concrete room, which makes it so much worse.
I've heard lots of people relating a similar situation. I think part of the problem is that it's perceived as being "uncool" to complain about noise levels. You are regarded as a kill joy and a crank if you do so. If enough people in bands who are suffering with loud levels, spoke up, I'm sure the situation would improve quickly.