Why buy cheap speakers??

Agreed, the old garbage in garbage out debate.
A pair of $10,000 speakers can't restore the sound coming from bad electronics.
I have heard $500 speakers sound great with $10,000 electronics, rarely as good the other way around.
Best to try and strike a balance, but source first always works best, IMO.

Steven... buy something like a ClearAudio Virtuoso Wood cartridge for that turntable of yours and then we'll talk.

Happy Listening!

That makes three of us. If you don't have a good source and amplification chain, you can't pick the right speakers for your room.

IMO, speakers are very personal and have the most variability in sound. Or put another way, there are more trade-offs to be made at the speaker level than the electronics level. So nail the front end, based on reviews, listening tests, friends systems, etc. You'll likely get much closer to a sound you like for a long time than with speakers.

Of course, be sure to take a systems approach and no matter what you spend for your speakers make sure the impedance and sensitivity match the electronics.

Steven,

Of course you are absolutely right given the extreme examples you listed ($300 cables $300 speakers) but some have more money than sense and honestly have the right to spend their money however they like.

I can't say for sure what is the best budget percentage for speakers but for sure you really should build a system around a good room and your dream speakers rather than your favorite speaker cables and interconnects. The room/speakers are where most of the rubber hits the road.

I have no problem with $500 speakers in $20K systems in a 12 by 12 attic space with low odd shaped ceilings but I try to warn newcomers to this hobby that they should primarily consider room acoustics and speakers FIRST.

On the other hand, I can recall getting really great sound from a cheap Sony cassette deck and a cheapish turntable (AR with MMT arm and Monster Alpha MC cart) through Acoustat 2+2s with custom-built tube servo-charge amplifiers.

So in my view, the amp-speaker combo is equally important as having a decent source. In fact I find cheap speaker/amp combinations are even more irritating and limiting than having a modest source with a great amp and speakers. Cheap speakers usually have so many problems and limitations that the best front-end in the world cannot hope to redeem.