Are These People Damaging The Web Development Industry?

Hello
Probably the biggest hammering I’ve received online came from this web site here.
One of the fundamental points of difference between myself and the forum members was that some saw my marketing and sales message as sleazy and damaging to the industry.
My view at the time (and still is) was that web designers who design pretty sites that aren’t functional (like many designer do) are the ones damaging the industry. That suggestion soon got howled down.
The Perfect Example
Anyway, today I saw the perfect example of what I’m talking about.
I went in to chat with a web site owner about a site where I need to develop 30 pages of content for a web site. The content will be provided by the client from the notes he has handwritten.
I won’t go into all of the work we’d need to implement to meet the client’s objectives because of this next bit.
The client told me a competitor had already quoted and the quote was for $100. That’s $100 in total. For developing 30 pages of content for a web site from handwritten notes and optimising the entire site for search engines.
I Wouldn’t Do 1 Page For $100
I wouldn’t do 1 page for $100. I mentioned to the client that to have the 30 pages of work done for $100 was unreasonable, but he had an answer for that.
The other quote he’d received was for $150!
So he was thinking the $125 was around the mark.
The Way I See It
The way I see it is this: these people (they’re both students) quoting these low, low, low charges are damaging the industry.
Because what happens is this:
* The job doesn’t get finished
* The project fails
* The client becomes convinced the web doesn’t work for his business
* The client never gets his web site redone because of the very poor past experience
And then the entire web industry suffers because not as much web development work is being done and not as many jobs are available. And on goes the vicious cycle.
What do you think? Are people doing web work for crazy low prices hurting or helping the industy?
Regards
Brendon