I agree with this in individual cases. On the whole though, most customers don't have good taste--by definition--because 'good taste' is a smaller fraction of the population.
Taste need not be good to be worth catering to. If people like things with bad taste, a competitor will cater to them if others aren't, just as competitors will cater to those with good taste too. This is a phrase about macroeconomic implications rather than in the micro.
