A low level of cometition in the camera market can support that, but if a new player comes in with good products and a lower price, Canon can only adjust their prices, fight on a different front (marketing and brand perception, usability, unique features, etc), or fade away. The C300 seems to have been very succesful on the usability front.
On the "cheaper equipment turns you into a commodity and hurt your income" debate, I tend to think it's not like that. Right now, talent makes the difference, not equipment, and that's a good thing. Lower prices hurt untalented people who had the money to buy expensive cameras, and help talented people who can only afford the cheap cameras. And I think that's good.
Now, the fact that everybody can learn how to shoot great images easily and cheaply (among other things, by reading stuff here on dvxuser), together with the lower price of cameras, that can have a significant effect. But keeping away the newbies is just not an option anymore.
I tend to agree with this line of thinking. I used to be an illustrator in a former life (I only draw my own storyboards these days) and the "equipment costs" are a pencil and paper. I was a poor kid in Brooklyn and had the same tools that people who were doing brilliant work and making millions had.
I think it should come down to how well you can market yourself and how good you are with that camera, rather than people not being able to afford the chance to work with that gear.