Only my two cents, with another example.
There are this headphones that you get with in an mp3 player (about 100€). They sound not really bad, at least if you only used headphones like this. There are also a lot of people who are very happy with e.g. Smartphone + “cheap” Bluethoot IEMs. Expensive means +50€ in this case. I used different sony mp3 players between 100 and 200€ for many many years.
Give these users an IEM that cost more than 200€, I am sure many people would say “WTH?”… but not positive… missing bass, sound is “wrong”, … the 200€ thing does not hold in the ears… expensive crap. Reason? Either the device is not good or they do not use the IEM for e.g. a week. I can remember the same. I bought a Shure SE 535 for a Sony MP3 player, terrible sound. So I ordered a DAP Player from Pioneer. But even with the Pioneer, it takes some weeks to notice that the Shure is really much better.
I guess it’s the same if I would replace my SE 535 (about 400€) with an 1000€ IEM, it’s possible that it takes some time before I would hear the 600€ difference or I need another device too.
About “fit in the ear” my experience with the SE 535. I need weeks before I notice that none of the tips works. Either the sound was not good, too big for my ears or they do not hold. I use the trible flanke silicone now, but cut off one flanke and the root a little bit.
No… I don’t care any longer if I download flac or mp3 320.
Yes, my DAP device have SD-Slots and I don’t care about the sd storage, but waste space because of differences that I can’t hear? No, sorry.
In the meantime I heard some bad flacs too. Flac means not always good quality.