Small towns are where music happens. I live in Western, MA - I can see music every night. If I drive out to a small town in upstate New York, I guarantee you there will be a bar with live music. Even a run down shithole like Poughkeepsie or Catskill has plenty of local bands. Some huge names in music have come from small towns in Georgia or in Ohio or in Michigan. One of the biggest indie record labels is based out of Nebraska.
If "people would rather hear the best musicians in the world than the best musicians in their household or neighborhood" than why are local acts booming in places like Portland, ME? Why are small bands filling out the bottom portion of huge festivals or starting their own?
Your post reads to me like someone who doesn't seem very aware or involved in music and mostly gets their information from online source and so called historical research rather than first-hand live experience.