I think you don't need a premium guitar to sound good.
It the old thing, put a Squier on the hands of Malmsteen, give Zakk and Slash a Epiphone, give Brian May a chinese Red Special and they'll sound great as well, with less sustain, with less tone but still they'll sound great .
The biggest diference is the feeling when playing cheap guitars; usually the action is high which slows you down, the frets buzz, the intonation is off, you have to pick hard for the cheap pickups to capture all your nuances, ... so it's more of a problem to you than to the audience, on a blind sound evaluation I'm sure the high end guitars wouldn't always win.
Also you can improve these cheap guitars with better pickups, leveling frets, chaning the electronics, ....
To me the biggest diference in your tone will always be the amp, so I think that you should always invest more on the amp than on the guitar itself. It's hard to upgrade an amp if it isn't good, a guitar is easely upgraded.
Definitely agree with that. I just love guitars so I like what I like lol