How good does my system have to be to realize an improvement with cables?

"If you bought your gear at WalMart” - you can get good-n-bad gears everywhere these days.

nice and therefore expensive cables are just “nice”, not necessarily improving anything technically. I upgraded cables to make my whole system to be elegant and to manage cables to lower noise coupling, optimize loading, impedance etc.

What about the basic elements / fundamentals of music? One surely hopes for agreement / convergence.

Embrace this ⬆

Not that ⬇

My question is what's the  percentage of the overall component's cost should be the cabling and at what point should it even be considered?

Or put a different way How would you know if your cables are your weakest link?

There is no magic ratio of cable vs. component cost. Go with the flow and enjoy the journey. 

I have found the cables that made the biggest difference in my system was my amplifier power cord(s). That may not be the case in your system. 

I’ve heard the effects of interconnects and power cables in a system with an amp costing $700 and the speakers around 1K. The room was lightly treated with absorptive panels at the first reflection points. The difference was night and day so I assume equipment of lesser value would still see benefit.

“$200 for cables on a $500 DAC doesn’t make sense to me.”

Intuitively this seems logical. However, I think it only doesn’t make sense upon the original purchase. If you are hooking up a newly acquired $500 DAC and you’ve got a $200 power cable sitting around, throw it in there. I’ve been known to power a Sony PlayStation 1 ($50 on eBay) with a $200 power cable and it sounds great. I’m not about the put the cable back in the closet because a $200 power cable on a $50 CD player “doesn’t make sense.” Honestly, so much of this hobby is synergy it might make sense even when it’s an original purchase. One might view an oddball purchase like this to be the price to pay for saved time in not having to research and test all the cables that sound best with your player.

Not terribly good but cables should be near the end of the list of things you upgrade.  More bang for your buck upgrading electronics.