Danger Marion!!!

You replace your current guitar when you decide that it cannot do what you want it to do.

Whether or not you see anybody else playing classical guitar is not really the point.

You trade your classical guitar for a steel string when you decide that you want to produce the kind of sound that a steel stringed guitar makes. To your parents you say, "I love the sound of my classical guitar, but I have decided that I love the sound of a steel string better." That should be the only justification needed in this kind of discussion. It's along the lines of "I've switched to Guinness because I like it better than Bud." The discussion is not about "good enough" it is about personal preferences.

When it comes to music ,your emotions ARE the most important factor. It is one of the few areas in life that SHOULD be ruled by your PASSIONS. What is the point of making music if you are not doing it for love?