I was a kid working in a guitar shop back in the mid70s when I first read an article about Paul Reed Smith. At the time, the major manufacturers of American electric guitars, Gibson and Fender, had been bought out by corporations --Norlin and CBS-- with no tradition of instrument making, and both were producing guitars of very uneven quality and neither manufacturer had much insight into what guitar players wanted from an instrument. So, there was space in the market for someone like Smith to produce a guitar --at first he basically hand made a variant of the Les Paul-- that would gain a following based on quality and features that guitarists valued. (not to mention the early endorsement by Santana.)
I think a key difference between guitars and saxophones, however, was that there was a strong tradition that "THE" rock and roll guitars of the 50s/60s/70s were American made, and practically all the icons of the time played Gibson and Fender. The shop where I worked sold Ibanez guitars, Japanese made (Gibson and Fender were franchises held by the old line piano stores), and the Ibanez guitars were of higher and more uniform craftsmanship than contemporary Fender or Gibson, but players who could afford them still wanted Strats or Les Pauls. This sparked the vintage market, and then both Gibson and Fender were revived by new owners, and PRS also became a major producer known not so much for workmanlike guitars, as originally, but for inlay, highly flamed wood etc. (Hence the negative vibe among some in the guitar world that PRS are less tools for musicians than ornaments for physicians.) With few exceptions, the high-end guitar market today is US-made, but below that, nearly everything is Asian, even in the PRS lines. That US domination isn't explained by a gap in real quality, I would argue: there are Japanese and Chinese guitars that match any American guitar, but, even Japanese collectors buy US-made high end guitars.
So, I agree that it's hard to make a direct parallel to saxophones. The "it" brand by the 60s, Selmer, was not an American-identified product. It is interesting to me that the US=quality thing did not take hold among saxophonists, and the US manufacturers couldn't effectively compete either for the mass or high-end market (which is where the profit is.) No doubt Selmers were very good horns, but could the different connection to "made in the US" have been related to greater appreciation jazzers received in Europe, maybe even to greater respect shown to African American artists? Or maybe simply that it is harder for a casual fan to identify the make of a saxophone? Or is it the relative size of the markets? Interesting to speculate, but of course the sort of thing that is impossible to prove.
All my 2 cents, and perhaps not worth that much...
