Sorry, but the point isn't that the audience isn't "smart enough" to notice great tone. The point is that alot of guitarists let their impression of their own tone on any given night impact their playing way too much. When I say that the average person in the audience doesn't care about yr tone, I'm not dissing them at all. In fact, quite the opposite - they care about the overall quality of the performance and the specific characteristics of your tone that night will really only impact that impression if you happen to be putting out a particularly obnoxious sound for some reason. If you as a guitarist get on stage and think yr tone sucks that night but you play a killer show in spite of that, the crowd will say you rocked. If, otoh, you get out there and let what you percive as crummy tone affect your performance, the crowd may think you suck - but not becuase of the tone.
Its been said time and again already in this thread - "well, the crowd may not care, but I do and I need to have "my" tone in order to play my best." That's the problem, becuase the crowd doesn't give a crap about "your tone." Don't get me wrong now, I fall victim to exactly the same weakness. If I don't like what I'm hearing from my amp, I have a hard time getting enthusiastic with my playing. But, I've grown to recognise that as a bad thing and I make a real effort to play through the bad tone becuase I know that more often than not if I play well, the crowd won't notice the tone at all...