Back on point to the original topic. It's a free country and everyone has the same right to go into the sign business just like you did, and yes the industry is over saturated with people in it, thanks to the computer and cheap plotters. You are not going to see that change. Get over it.
So what can you do about it? There's plenty you can do... But first, you need to set yourself apart from everyone else who is just selling a commodity. As long as you're selling the same crap that everyone else is, expect to compete on price alone, and low price will generally win in this day and age.
However, there's a lot more to this business than chopping out and selling vinyl letters by the pound. Customer service, the quality of your work, advertising value of your products, your talent and the diversity of your product line, all of these added up can make you better than your competition. If you're willing to excel in all of these areas and run your business the right way, you won't have to spend your time being pissed off or paranoid about every Joe Blow down the street selling his commodity. You have to stop worrying about what your competition charges and stop letting them set your prices. It's possible to get more money for your work, but not if you're selling the same garbage that the competition is putting out and selling for less.
I'm in a relatively small town. I've been here for eighteen years and have always stayed busy. I have a reputation for being expensive, one that I'm proud of. I've seen countless shops open up and close, all thinking they could make a killing if they undercut everyone's price. Eventually they price themselves "out of business". Working for nothing isn't much fun after a while.
So instead of whining and complaining about everyone else in the business, learn how to run your business successfully and be the exception. Yes it's harder to be in this business today, but that just means you have to work harder at it to be better than the other guy. What you invest in this business is directly related to what you will get out of it. And I'm not talking about investing in equipment either. There are more important things you should be investing in. Basic business fundamentals, your design skills, marketing, these are the important areas where you should invest most of your time and money. A tool is only as good as the person who knows how to use it. Crap work printed on a $30k printer still looks like crap.
Don't be one of those shops today that are systematically destroying our communities with their graphic pollution that litters this country. They should be ashamed of what they've done! Most here will never "get it" but maybe a few just might.