Nate, brilliant post. Seriously. I enjoyed the read, very much, and agree with a great deal of your sentiment.
However, and I don't say this to annoy you, but, uhh...story is most important.
Lemme get back to that, because you made the point, very clearly, that just because you want better image, that doesn't mean you've forgotten the importance of story. I get what you're saying, I'm with you, but there is a reason I point this out. Back to that later.
As many people have mentioned, it doesn't really work for you to make a blanket statement about what everyone should be striving for, in their immediate future, filmmaking-wise. I mean, to be honest, a lot of people might read your post as coming off like, "Hey, poor people. You should stop being poor. Get some money, already. Get some money, and be rich. Because having things is better than not having things."
Dude. We all want the Red. We all want to shoot on the Red. We all want a large, professional cast & crew. We all want budgets!
You've argued that it's a waste of time to make significant filmmaking efforts, if you don't have the top gear. It was a waste of time for you, but it hasn't been a waste of time for me, and it hasn't been a waste of time for the great number of small-time filmmakers I personally know, who are working through their own struggles.
To counter your story, here's mine:
After high school, never seriously considered filmmaking as a career, thinking it was too much of an impossible dream. Took the "safe" route, got a college degree, moved on to a "normal" career.
Wasn't happy with "normal" career. Decided I wouldn't be happy, unless working professionally as a musician. Went back to school, for a degree in music.
While preparing for music degree, discovered that I'm actually kinda good at my true passion -- filmmaking. Decided to continue working in a restaurant, while practicing my skills as a filmmaker. Decided to be a stereotypical "starving artist".
Did this for years. Got better at my craft. Grew increasingly frustrated with crappy actual-career in restaurant biz. Dealt with countless frustrations, invested pretty much every penny I could save, into my chosen art.
Eventually, I reached a boiling-point. I couldn't just do the starving-artist thing, anymore. I needed some sort of breakthrough, or else I simply had to call it quits, and go back to a "normal" job. I NEEDED TO MAKE A FEATURE FILM!!!
I would make my feature film with whatever resources I could gather. And that meant shooting it with a cheap camera that was built for photography, with only a kit lens, a cheap light-kit that I would barely even use, and a whopping crew of 2, including myself.
Now, I'm not afraid to admit that I dream just as big as the next person -- I couldn't help but dream that this tiny production could somehow gain national exposure and that I could sell it. But I never planned on that. From the beginning, the plan was nothing more than for me to make this movie as a showcase of what I'm capable of creating. And, hopefully, that might lead to somebody choosing to invest in my next feature.
The point is -- FOR ME, it made perfect sense to shoot a feature film on the most humble of equipment, with no real crew. And you know what? I personally know a good deal of filmmakers for whom it makes all the sense in the world for them to continue shooting on the equipment they've got.
Filmmaking isn't always the simple profit-oriented scheme that you've painted it to be. For many of us, the equation is a bit more complex, and I personally don't know any small-time filmmakers who would characterize their efforts as a waste of time. Though, yes, we'd all like to shoot on the Red.
Now, back to that catch-phrase that annoys you -- "Story is most important". I understand why it annoys you, as you've pointed out that it is often implied that just because someone cares about the picture that they don't care about story. But of course we know that they are not mutually exclusive -- the best films have a brilliant story AND gorgeous visuals.
However, that catch-phrase is nonetheless important to remember, for a couple reasons. First, for some of us, story is all we've got. I'm not a cinematographer, dude. I don't do SFX. I suck at audio. I'm a shitty colorist. The list goes on. But you know what? I kinda kick-ass at story, and so that is what I focus my efforts on.
Secondly, it's simply not true that a good story can't flourish without the best visuals. Don't believe me? Ask the Duplass bros.