In past you had to have musical talent to become a musician. People would come to watch the artist create the music.
Today the only requirement is a pretty face, or slick image. The studio could make my cat a rockstar.
Because of that many 'live' shows are now pre-recorded, or just shit.
Great musicians busk for coins in the subway, while untalented hacks, with big racks, collect all the rewards from media.
Larger rock/pop groups can afford to be shit, but a punk band playing a 30 show tour to 50 people every night can not.
In one sentence you've just explained why small budget independent bands often have more quality and talent.
If you're an 'opening act', the only thing that will keep you afloat is good performances. And those require skill if you lack the budget.
In addition to that, I don't think record labels want too much talent in their products. If a singer could make it without the studio, that gives them bargaining leverage.
An untalented person can be made to sound good, but will work for peanuts and never leave.
There are others too, like post rock, sometimes shoegaze. In general I would agree though.
I think production quality got too high, it's even an issue with some punk bands. One explanation of why the live thing happens is because there is more money in touring compared to album sales than ever before. Larger rock/pop groups can afford to be shit, but a punk band playing a 30 show tour to 50 people every night can not.