"all but a return to the music industry's values that we walked away from to make our own music."

Sorry to nitpick, but it seems to me that Jim has been clear that the people there in his clubs were not making their own music, they were making other peoples. To use Jim's own terms, songs from 'the tradition' were being performed on the 'scene'.   

I do recall reading that Lloyd himself was often critical of people whom he thought were not very good, so the rot (if any) must have set in when he was still around.

But maybe this simply is a case of the old looking back through the mists of memory and saying how much better stuff was in the old day?