This is a topic that comes up frequently here, with no consensus. The difficulty is that we are all different — the answer for me may not be correct for you. It depends on your vision and interests / obsessiveness as well. I would argue the diminishing returns for optical quality kick in much lower than $1000 for MOST people (this forum is NOT representative of most people!).
Thanks to the explosion of Chinese outsourced manufacturing, in terms of central (on axis) brightness / clarity / resolution, which is what normal non-optics-obsessed people care about, the gains start getting incremental after the $300-500 level. You have to really be serious about birding and/or optics to truly need anything beyond that.
My assessment after many years and many binoculars (these are VERY broad generalizations and implicitly focused on typical roof prisms used by birders):
- The biggest jump is from the cheap garbage (usually $100 or less) to the $200-300 binocular level (Vortex Dback, Nikon Monarch 5, many Chinese OEMs like Athlon, etc). A typical beginner or casual user will be perfectly fine here and 95%+ of normal humans will never need to go farther.
- There’s a decent sized jump in optics and build quality to the $400-600 mid tier level (Vortex Viper HD, Nikon Monarch 7, Meopta Meopro HD, etc). But beyond this diminishing returns really kick in for all but the most serious and/or well funded users.
- The jump to the “sub alpha” level ($800-1200, eg Zeiss Conquest HD, Nikon Monarch HG, Kowa Genesis, Leica Trinovid) is a decent sized bump in refinement, in both optics and build quality, that would be noticeable to a serious enthusiast. These are serious optics with top notch optics and excellent mechanical quality, but most casuals would be hard pressed to notice or care about the difference from the tier below. I view this as the Toyota vs Lexus level; the Toyota will do everything you need to do and for the vast majority of people it’s hard to justify the extra expense, but some people will appreciate and be willing to pay for the extra smoothness, refinement, and more luxurious finishing materials.
- Beyond the $1000 level the improvements get much, much smaller, and only a serious enthusiast or someone with a big budget really needs to go here. This is the best of the best, with even more optical refinement (that is difficult to notice for 99% of people), the leading edge of engineering and technology, and no expense spared on the luxury and quality of mechanicals and exterior finishing. The difference is there if you know what to look for, and if you’ve got the money go for it, but it’s hard to objectively argue that anyone NEEDS something that nice or expensive vs the tier below.