Granted, most people in an audience don't care about plugin versus the real 1176 but, as an engineer, I do, and it is my job to deliver the goods to the artist the best that I can. And good songs? Sure, a good song will always be a good song but whether it is done with Pro Tools or not is a matter of subjectivity. In either case, your live ACT should reflect that you are more than a studio person and should be able to deliver live on stage. Also, note this important thing about the process of recording - it involves a process of creativity that requires an idea and the task of translating that idea from a mental perspective into actuality. As a performer, I want my music to be heard the way I hear it in MY head. Whether someone else cares about how it sounds, and whether or not they worry about the fact that I used a real LA-2A versus the plugiin on my UAD is something I don't pay very much attention to or care about until way, way later in the process (post-prod mixing). For the most part, the process of creating a song doesn't involve the audience because the process of producing is something between me, and the medium I am working with. I want my song to sound the best way possible. Can the song sound any less effective if I used cheaper stuff? Maybe - but get this: I am not willing to compromise if I have the means to make the product better, and I sure as hell would want my money's worth from the engineer if I pay them money to record my songs. Wouldn't you want the most for your buck? The process of recording is analogous to painting, something I can relate to since I have been in fine arts for over 20 years, and there is a obvious difference between bad materials and good. I will be the first to lay my b@lls on the line to claim that no artist I know is ever willing to compromise the production of their work with bad materials if they can afford better paints and brushes. The same applies to music production.
Now, can the Phils produce better sounding songs without the aid of PT or Neve or whatever else? Sure. If you think about it, the only things limiting the way song recording quality compares is the A/D converters that is employed to convert your signal into data your DAW can understand. If you master the features of your gear, the playing field is more than fair game nowadays; what you have to do is test the limits of your current equipment to produce music at its very best wthout breaking the bank.
A great example of an album recorded on a budget is Soulstice's debut album "Illusion" off Om Records. That whole album was done on a Digi001, in a warehouse in San Francisco. Yes - a warehouse with concrete walls, and cavernous ceilings; not exactly your acoustic environment eh? But you do what you have to do to get a good recording sound. I later talked to Mei Lwun Yee about the recording process and the only thing they really needed to build to make the process of recording better was a vocal and iso booth out of carpeting, and ply wood to isolate Gina's voice better in the mix. The drums, guitars, and bass were all done in the same booth with bits DI'd through for good measure. I've done something similar in my control room at home to great effect with wool blankets draped around a singer using boom mike stands in a triangle position around the singer. Again, you do what you have to do to get a good recording sound.