I auditioned Paradigm Studio 20 ($800/pair) versus Active 20 ($1600/pair) about 8 years ago. It was no contest. The Studio 20 is a well built decent sounding hi-fi entry level 2-way standmounted speaker. But the Active 20 had flatter frequency response, huge dynamics, and unbelievable strong/deep bass (on par with their $1600 Studio 80 floorstanders). Bystanders were slackjawed. For the extra money you'd be crazy not to have gone with the Actives.
Modern marketing has convinced most of the "need" for 20 - 20,000 Hz at 110 dB. This sells lots of equipment as that gets very expensive if done right and generates lots of fustrations when not done right (usually the case). The fustrations leads to more sales as the hapless audiophile chases his tail. The expense can start with the need for the proper room (that the vast majority don't have and so can never get really good sound). Give me a nice $2000 system in a decent room over a $20,000 system in a crummy room any day.
As far as new product ideas, how about a good build/sound quality compact audio system that accommodates an iPod? Shanling introduced one earlier this year (typical flash gordon looks that played CDs and had an AM/FM tuner I believe), but it was low powered, had a small display, came with questionable speakers, and was priced too high ($1000). The market I'm envisioning is college dorms, and 2nd systems with the price staying around $500. Basically an upscale car stereo with large display, sleep function, but with a smaller/higher quality amp. Something to compete intelligently with the Bose wave radio. The iPod dock would be central, but the CD/AM/FM features are still needed to separate it from all the iPod accessories out there. Hopefully it would provide a taste of hi-end and endice the straights to enter the world of audiophilia.