Interesting thread, Laundrew. There are brands that heavily cater to the "Carrot on a stick" crowd, and there are companies that'll wait till there's truly a sonic upgrade to replace a model - Musical Fidelity and Bryston, respectively.
With regard to digital products and the evolution they've had recently, part of it is the carrot on a stick, but I think it's genuinely a small part of it. Music servers and DACs are truly in their infancy, and therefore there's a very sharp R&D curve, if you will.
I don't have the luxury of spending a ton of money on this stuff, but if I did I'd be pretty weary. Not weary in a sense that I'd feel the companies were out to get every dime out of me possible by introducing planned obsolescence products, but weary that today's cutting edge technology that costs a ton of money will be next month's or year's entry-level stuff.
When seeing posts by newbies starting a new system, I always advise they buy the best amplification they can afford. Amps are IMO the longest term and longer lasting products in a system. People say speakers first, but I don't agree (although do respect why). Moving parts wear out quicker than non-moving parts. Rooms change, and speakers sound different in different rooms. A good amp that drive any reasonable speaker to reasonable levels is the most solid investment IMO.
Sources and formats come and go.
But, a great sounding source will always be a teat sounding source. A DAC mkII doesn't make the DAC mkI sound worse, does it? The mkII is better, but the mkI didn't have an internal chip the company hid in it to start degrading the sound the day after the mkII was released to the public.
I bought the Rega DAC because it was easily the best sounding DAC I've heard in my price range. It was definitely worth the extra money over stuff priced under it, and it was close enough to stuff priced above it. Whenever Rega replaces it or adds a model above it, I'd be interested in hearing it, but I won't dwell on it by any means. Why? Because what I've got sounds as close to perfect as I'm going to get.
There's better out there. But there'll always be better. Some people have a harder time accepting that than others. There's nothing wrong with chasing the holy trail if you can afford to do so. I think a few too many chase it without having the means to comfortably do so, but that's there business, not mine. Everyone's got their own priorities; mine aren't inherently better or worse than the next guy's, they're just mine.