As cd318 stated. "Mid-fi" was and is mostly a marketing term to make you think you need to spend $$$ more than you want for a given level of quality in sound.
Everything is an engineering to price compromise at ANY level. But the goal is or should always be the same: Provide as good a full-range sound as possible with good dynamics without coloration.
Of course it seems that 80% of consumer speakers don’t follow that paradigm and too often intentionally color the sound. Some manufacturers even tout that as their "signature sound". Or boost the bass for bass heads. People coming from crappy earbuds into this hobby are impressed by that of course, but then later find themselves wanting something more balanced.
So, at the end of the day, when you reach a level of hearing all the detail you desire with music sounding as real as possible, I think you are "there".
It is all an illusion. No speaker I’ve ever heard sounds as real as a real instrument because it is NOT the real thing. Yes, they can come close and that is a good thing. But even people listening from another room can distinguish the difference.
It is pretty amazing though. A piece of paper flapping can be made to sound like a flute, a bass drum, a human voice. Great physics for sure.
This is a hobby after all. Something to enjoy on the journey, doing some experimentation, and finding out what compromises suit you.
By definition I think most of us know that things such as Bluetooth speakers, most earbuds, and such are either Lo-fi or Mid-fi. Then moving up to a decent AVR and speakers should get you to a good place, then moving up to separates get you even more.
Spend $400, $4000, $40,000. Somewhere in there you should find what you are looking for within the limits of technology. Just don’t forget to factor in your room acoustics of course.
Compared to the 1950s we are living in a great era for quality sound at all budget levels. Not bad.
I just wish more younger people would get into this hobby and keep it going. I'm not sure all the niche higher end manufacturers will be able to stay in business with a declining clientele.