In my opinion the recording process (of a band that is) should first and foremost attempt to accurately capture the sound of that band. So if you're band sounds like cavemen banging on garbage cans and singing through broken megaphones then you're recording should capture that. if you're band sounds like robots programed to execute technical passages with precision and tonal perfection, then your recording should reflect that. Your recording quality can be a way of further trying to recreate that experience and sound and with technology as advanced as it is and recording equipment as cheap as it is, cost is not really an excuse. it's more of a choice.
On a side note, I know many people will disagree with me, but i've always been of the opinion that post production effects or overdubs that couldn't be/aren't created live or don't promote the true sound of the band usually have no place on recordings of bands (this would include using a lo-fi recording style on a not lo-fi band). This is also why i prefer when bands record live because there is something of the group dynamic that is lost when instruments are individually tracked, and thus part of the band's true sound is lost.
Anyway, with all that said, i know some people view recording as an opportunity to create something that can't be created live and like to take advantage of it's power to do so. sorta like animations ability to reach beyond the bounds of what live action can achieve, and this type of recording certainly has it's place as well...but perhaps that's a different discussion.