I've been playing for around 13 years with a Korean Strat as my main axe. I don't have any performance issues with it. It works just like a Strat should.
Lately, with the addition of a few Chinese Strats and now and Indonesian Squier Strat, these inexpensive guitars are what I've been playing. I really like my Chinese Strats with alnico pickups. They do the job and I'm not fighting some hunk of junk. They perform as I expect. Yes I have American made guitars as well and they are nice too.
I look at it like this: if it works like I want it to - if it sounds like I want it to or I can make it that way cheaply - if I don't have to fight it (like that never happens with a Strat, you know what I mean) - and it is structurally sound then I really don't care where it was made or what I spent on it. It's just a tool! A good guitar is a good guitar. If I get one that isn't good - out it goes and I keep trying till I find a good one. The major instrument sellers are great because of their return policies and they allow you to do this.
Compare Snap On, Mac, Craftsman etc. tools. They all do the job and are essentially the same. Just like guitars or bicycles. Yes you can customize the latter two to get more performance, but they are still basically the same.
I don't think I'm even going to switch out the alnico pickups in any of the Squiers but will probably do so with a Mexican Strat. Heck even the Affinity series has a slimmer solid alder body and what about the wonderful 51? The machining has just gotten a lot better and more consistent at the factories. Sure some of the parts are not quite as durable as more expensive models yet they seem to hold up pretty well.
So far I'm only talking about my experiences with low priced Arias, Squiers, Ibanez and Peaveys. There are a lot more brands out there that seem to be every bit as good as the ones I've tried so far. Even expensive guitars have limitations. The performance, in my opinion is not that different. It is to some degree the instrument, but mostly it's the player.
For the price of a Deluxe American Strat I can buy a Squier Strat, a set neck humbucking guitar, a P90 equipped guitar and a decent amp.
So my budget works like this: I budget for one guitar (a really expensive one) then take that money and buy 5 instead. Clever huh?
ps. What Kat said too.