Make no mistake we have lots of small bars where wannabes and young inexperienced bands play for peanuts. Everywhere has to have a "nursery" or breeding ground.
I am surprised that this breeding ground is so extensive in the States that it has caused these problems. Does this mean that the overall standard of live music has dropped? After all folk will only play free for so long before giving up. It figures that there would come a time when quality would be in demand and folk have to open their wallet if they want quality. Eg If I own a venue and paid good rates then I could get the best bands. If only the best bands perform in my venue then the punters do not want to hear a mediocre band down the road. My venue would be packed and the other venues empty. It is only a matter of time before others follow suit and a chain reaction results.

http://www.soundclick.com/bands/songInfo.cfm?bandID=687727&songID=5238055