I’m painting with a broad brush here, and there are certainly exceptions, but in my experience what you described has resulted in the only people left patronizing those dirt cheap bars being people who don’t make for good company and not always very pleasant to be around. Which then feeds back into the original issue.

On the other hand those kinds of bars tend to be pretty enjoyable in neighborhoods that are above poverty-stricken but not yet gentrified. Basically a working class neighborhood of old, which rarely exist anymore - or not for long.