IBD attracts bright people because it pays well. Simple. Needless to say, were the salaries to go down, the numbers applying would plummet, as would the quality of the candidates applying.
From what I've heard, the work done isn't particularly hard; I always assumed the wages were high merely because of the sheer volume of work done as well as the competition.
If it were to become a regular paying job* with lower quality employees, would the quality of the service provided by analysts and associates go down that much?
*Starting salary 40-50k with no bonus, assume regular hours with the workload of 1 person shared between 2 or 3 people to bring it down to 40/hr weeks