Have we set a baseline definition here for what a "bottom feeder" is? This term may all mean different things to different people on this thread.
I define "bottom feeder" as a non-professional. To me, it is not so much about the price as it is what they are doing to our industry - making it look like anyone can do what we do. Yes, anyone can be a bottom feeder - they can go to their local GC on black friday, pick up some $99 powered speakers, stream their music on Youtube, charge however much or little they please and proclaim they are a "Wedding Dj", purposely cutting us professionals down and undercutting us by pulling the wool over a clients' eyes and pretending to offer the same thing (or just being too stupid to know the difference).
By my definition, I've seen bottom feeders around here charging $350 to do weddings - I've also seen them as expensive as $650.
Another company owner in my area actually called me a "bottom feeder" at one point because I was running a graduation party special at a low price, and sending out my trainees to get their feet wet with some cheaper (Peavey) equipment. In my opinion, this was not a bottom feeder move. I generally don't personally take graduation parties anymore, and I realize the only way to build my company further is through managing others and having more systems out. In this case, I was simply serving a market need at the price the market commanded that summer. Obviously I could not send these trainees to weddings, nor could I offer weddings at that pricepoint since I am using experienced staff and higher end equipment. I wasn't making a fortune off of it either - I think my cut was around $100 per system out (with me supplying the equipment). The main advantage to me was I didn't have to turn business away, and it saved a little money on training.
Weddings require a whole different skill set. You need management experience (either people or project management), you need to be organized and able to plan, you need to have a wider variety of music knowledge, you need to have command over the English language with strong microphone/presentation skills and the technical aptitude to master equipment inside and out. Experience helps you think on your feet whether it's making an ad-hoc change, troubleshooting something that went down (without panic), finding the next song in your set, or finding the right thing to say. Not everyone out there with a set of speakers and knowledge of some dance songs fits this criteria.
Just because someone is charging $50 an hour (or some other low number well under fair market value), it doesn't necessarily make them a bottom feeder. They might be a really good hobbyist who only accepts a few gigs per year. If they are truly good at what they do, and doing everything right, then it is not sustainable to tie up all your weekends at low rates (I know this from experience). To do this right, many are probably spending a minimum of $3000-$5000 on their racks, and probably spending about $100/mo on music, meaning you'd have to work basically for free for over 60 hours (@ $50/hr) until you're profitable. Unless you really, really, really love volunteering, this makes absolutely no sense from a business standpoint. Again, lets assume one of these guys (or gals) are doing everything right - they're either going to have such a full schedule they have a waiting list, or they are going to be so burned out they're only taking a few jobs per year. Not to mention, if something gets spilled on a controller or amplifier or a powered speaker gets dropped, then what (without insurance hopefully their checking account can take the hit).
I'd imagine a lot of you are defining bottom feeders as simply "the Craigslist" company or whatever. I don't really consider them a threat because in many cases it's not a legitimate company. If I saw a busy enough bottom feeder around here, my first instinct would be to recruit them. It could potentially be a great symbiotic relationship where they get paid more working for me, they bring more business in by their overflow, and they have the backing of my equipment, staff and insurance as long as they aren't being an idiot. I had a young kid (Craigslist Dj) seek me out and work for me for a summer two years ago because he wanted to learn how to do weddings professionally, and he could not get into certain halls because he didn't have insurance etc. He was able to book things he otherwise wouldn't have been able to with our equipment and credentials and also had someone experienced out on the job with him running it. The minute you have to think about things from a business/managers' perspective (dealing with the stress of staff, paperwork etc.) - a lot of the "fun" goes out the window. Once he saw the other end of things and he realized this might not be for him.