I think the sweet spot is somewhere around the 300€ range. Below that you definitely already get perfectly reasonable phones, but you still have to make compromises. But at that price point you get most things and the missing features are not as important.
Past that diminishing returns are hitting hard.
The one thing that usually scales the most past that point is the camera. But a phone like the pixel 6a already takes amazing photos. And the only real difference you usually find are extra lenses (particularly zoom).
The only time i could ever see those 1k top phones start to make sense is, if we ever get to the point where phones can replace our personal computers and you just slot them into a dock at home.