Disclaimer: Handmade, hand carved, etc guitars are exempt
This might be a highly subjective and loaded question, but what makes an expensive guitar better than a cheaper model besides country of origin and name brand parts? If you do a nice setup on a $99 Squier and throw on some improved hardware/pickups...what makes a Fender Strat better? The time it takes for quality craftsmanship is an obvious reason as is the difference in labor costs in the country of origin, but since a lot of the work on "off the shelf" guitars are done by machine and final assembly is left to humans...is the extra cost name brand parts and attention to the setup?
Probably a stupid question, but I can't help thinking that a decent cheap guitar can be just as good as guitars 10x the cost with a little work. For example, I bought a Jay Turser JT-300 and after some tweaking it feels and looks just as nice as my USA made Charvel So-Cal. Again, that is highly subjective and the Floyd Rose on my Charvel costs more than double what I paid for the Jay Turser.