I totally agree with the OP - I'm not a studio, but I've started offering vocal recording/tuning services - I don't charge much and I don't make myself out to be any more than a solution for people who want to get something of remote quality down onto a track - I don't bitch if they bring in an MP3 backing track or whatever, I merely explain the process and how you can get the best quality possible. With the money I make from work and from this side-project, I can start to afford better mics like a U87 (now I've got a decent enough job this mic can finally become a reality for me, been waiting 5+ years for one now) and better pre amps etc.
However, I don't go around saying "multi-million" recording "studio", I record vocals and/or tune them for people who would not be able to afford even the most basic setup. People go away happy if you treat them right and if it sounds good for the price
. Truth is, not a lot of gear is needed so much any more for a decent enough sound - 90% of the people I meet love
MP3s. Meh, what you gonna do. I suppose as long as we get paid...