I've seen people get great-looking logo designs for $300 using http://99designs.com
I'm sure it pisses off $5000/logo designers as much as iStockphoto pisses off people that used to make a good living from stock photography, but welcome to the 21st century.
Spec work sites like 99designs are ripe with stolen illustrations from stock sites.
Should you ever get caught with a logo using stolen works, you're setting yourself up for some really hefty fees regardless of where you obtained the work. This isn't conjecture, it's happened before:
That's a great article. (The word is "rife", btw.)
As the article hints, it's a problem of economics. With spec work, the artist only gets paid on a few works out of many. To make many works and still earn a living wage, the artist must make each work with a fraction of the resources usually allocated to a professional work -- which on average can't compete with stolen works produced with more resources.
If spec work paid more, real artists might be able to compete -- but the only reason people want spec work is because it is cheaper... in the short term at least.
I could care less about the 5k logo designers, but spec work is horrible and if you use sites like 99designs you are getting exactly what you pay for. No GOOD designer is going to spend hours tweaking a logo to your liking when he's competing with 100's of other designers and no guarantee he's going to win, ESPECIALLY for $300. Try convincing a developer to do anything remotely close to this and you'll be laughed at as well.
You say that, and yet I see numerous designs on there that I think are fine. Not mind-blowing, but when you're starting out, your design and logo don't have to be incredible. Design should be iterative too.
I'm sure it pisses off $5000/logo designers as much as iStockphoto pisses off people that used to make a good living from stock photography, but welcome to the 21st century.