This is very true. I don't think it was Apple's fault necessarily for crappy earbuds. People should've known better. And to just crank the volume up so their music leaks all over the public while using earbuds is pretty bad too.
Overall I think if people embrace Beats, we'll be one level up from crappy audio quality of Apple earbuds, but it's still far from what is considered good. That's fine though. I'll let the general public continue using their crap while I use my Westone W40s.
If the difference between Beats Solo's and Westone W40s, or "good ones" is $400, then I and many others will be satisfied with the Solos. I'm pretty sure 99% of the population cannot hear the lost/removed information from an .mp3 file. For the 1% with perfect pitch and great hearing, they're free to pick up $500 head phones and be perfectly satisfied.
I've played with a lot of different headphones and my Solo's sound pretty clean. If that means my hearing is only good enough to be satisfied with Beats, or $80 Shure's, or $100 Klipsch, or something, then so be it.
It seems rather ridiculous to say stuff like "those $199 headphones are garbage. If you really want to hear your music, buy these $700 headphones". You always get what you paid for, right? I expect $700 headphones to sound drastically better than $200 headphones, but if I can't tell the difference, that $500 delta is pure waste.
In my case, I was always satisfied with $20 skullcandy earbuds. I traveled with some Shure over the ear headphones. One day, the in-ear earbuds were just killing me, and thanks to my company discount, I bought a pair of Beats Solos (partly because I could walk in to the store and walk out with them in 5 minutes. Sure, I could have bought cheaper options, but I didn't want to wait for processing and shipping). I'm certainly no "audiophile", but I like my music to sound clean and crisp and, to me, my music sounds that way through the Solos.