I'm on the fence on this one - there is a lot of BS and myths often perpetuated by people who've never done any real testing of their own and often people are talking about distortion which isn't always a negative but... but also I can't completely agree with Dowie and those making similar claims based on 100s of hours messing about with DIY DACs and amps.
there is some truth to things like as long as it's copper wiring (with nothing else mixed in) and of a decent thickness for the length of the run there is no need to spend stupid amounts on wires and cables.
as in a decent £15 metre long cable. will sound just as good as a £100 metre long cable. given that the £15 metre long cable is pure copper of a decent thickness.
however the longer you go the more you need to spend. some companies will skimp on the quality of the cable and focus on drivers. for instance you can buy upgraded cables for phillips fidelios for only £15. the cable that comes with it therefore is of poor quality however no need to spend £200 on a decent one, £15 will do the job.
then you have hd600's and hd650's they come with decent cables. in order to upgrade you need to spend a minimum of £200 and up to £400. however i'm guessing you could make the same cable yourself for less than £50. so yes a lot of snake oil in the cost but not in the quality.
DAC's are not cheap to make and most tend to colour the sound somewhat. you normally have bright sounding dac's, warm and neutral. it's personal preference.
so i could spend £600 on one DAC and £600 on another and they sound different. better =/= different.
sound is very subjective. otherwise everyone would focus on neutral amps, neutral headphones and neutral dac's with no equalisation at all. humans prefer a warm sound naturally. the shrill of highs will fatigue your ears if overdone and sound unpleasant.
if all you have ever bought is cheap stuff under £100 then you know no better. once you start dabbling in the £100-£300 market and that is for each piece. up to £300 on each a dac, amp, headphones, so up to £900 total. that is when you essentially hit the sweet spot in terms law of diminishing returns. after that you are paying more and more for small improvements.
i have a £120 dac/amp and the DAC is amazing in it but the amp isn't that good. so then i bought a £150 amp to compliment it but then it's a waste of the amp in the dac. so i should sell it and get a £100-£200 dac but it's good enough for me.
if you do your research and buy something recommended by audiophiles on head fi you can't go wrong.
for instance apparently the main weak spot is the power source in my £120 dac/amp. however i would need to spend £200 to get a better one. spending £200 for a power source for a £120 dac/amp makes zero sense. best to just buy better in the first place.
so yes someone selling me a £200 power source would be deemed snake oil. as i would be better off taking that £200 adding it to my original budget and buying a £320 dac/amp.
which is why i guess a lot of people don't spend £200-£400 on cables for their hd600's and hd650's.
it's the law of diminishing returns.
99% of people would be happy with spending say £500 max on a full setup. as in <£500 divided by dac/amp and headphones. there are people who will spend £800 just on headphones alone for instance but they are IMO not worth it unless you have money to burn.
however to say a £500 setup is a waste of money is ludicrous. it will sound a hell of a lot better than a £100 setup.