Price definitely follows a law of diminishing returns.
In general, most practical needs can be address by a relatively inexpensive light. However, quality tends to go up pretty quickly at the low end of the price scale, and there are some things you simply can’t get without paying a premium. I tend to avoid the items priced at $10 or less because most of them are junk, but there’s some really good stuff in the $15 to $60 range. Anything more than that must be really special or I won’t even consider it.
Cheap items are cheap. Bad anodizing, bad light tint, bad heat sinking, flaky parts, poor build quality, short run time, slow PWM, designed to look cool instead of working well, clone of a clone of a clone, etc. But it’s mostly possible to get something pretty good for like 3X to 10X the price of the really cheap stuff. There’s rarely any need to go into the three-digit price range mentioned in the OP.
For example, compare a SK-68 ($4) to a XinTD C8 ($30). Pretty huge difference in quality. However, going from the XinTD C8 to a similar light in the $100 to $400 price range? They’ll give you pretty much the same output with nearly the same build quality and only a few smallish upgrades which may or may not matter. Maybe the expensive one uses current control instead of fast PWM, but most people can’t see the difference. The more expensive one might offer better shock absorption for rifle mounting. Perhaps it offers more tactical modes or signalling modes or the ability to change settings silently. Or perhaps it has a lot more features, such as the Nitecore SRT7 or CU6, which both have some nifty color (or even UV) modes.
I find I’m willing to pay a premium price for some things… like, I have a couple Zebralights because there simply isn’t anything else on the market with similar features for less money. And I ordered a pricey titanium light so I’d have something really nice as my primary EDC. But mostly, I tend to go for lights near the upper end of the “budget” range — like, a Convoy instead of an UltraFire. And I don’t think I have any lights at all with a three-digit price tag, because the ones I tried weren’t really worth that much to me.
It really just depends on what you need. Chances are, if you tell people here what your needs are, they can recommend something relatively inexpensive which would work.