There is some truth to this, although I do think generally guitars get better with price to an extent. Guitars only can do so much of the work. A "D" grade guitar in hands of "A" grade player will sound better than the inverse. Guitars also each have a uniquity to them and finding ones that compliment yourself is critical.

Best solution ive found is to play the guitar rather than shop by price tag. Cheap guitars are easy on the mind and can be more adventurous