The difference between an $800 bike and a $100 second hand one isn't really that big. You certainly can't call the other one a shitty, impractical bike, as I see hundreds of thousands of people around me ride on them just fine. From menial workers to bank managers, no joke, hell the bank manager in a suit riding a shitty rattling $50 is a common sight, as anyone here in Amsterdam! It's only shitty because it looks shitty and rattles, but it works fine, and for a little bit more money you get a quiet, nice functional bike. The whole 'slower' part is nonsense (to me) unless you're doing this for sport on some kind of a (semi) track. Amsterdam is great for cycling, but you have a stoplight every 200m and cars, people and bikes everywhere. It's not like you can really take advantage of speed, and within the speed limits I tend to zip past 95/100 people on my $100 bike. It's like saying one car goes 200 MpH and the other goes only 100 and saying the latter is much slower. It is, but who cares if you're driving in the city?
I'm just saying this as at times people seem to compare a $200 bike to $1500 bikes as if they're comparing a crappy $250 7 inch netbook to a Macbook Pro Retina. While in reality, it's more like comparing a $15k watch to a $50 watch, they function exactly the same, tell you the time extremely accurately, easily last years, but one is cool, scarce, luxurious, and the other functional.
I appreciate there's gonna be some difference between a $100 and a $800 bike, not saying there's none, just saying there's not that much.
In any case, I concur with the guy from Rotterdam. Bike theft is intense (for me with a decent lock it's about once a year). But my replacement cost is low. I usually spend about $100 on a bike yearly which includes all costs.
Beyond that though, we simply have a huge bike market with lots of competition here. And because everyone rides bikes, you don't have to culturally differentiate yourself with a special bike like in some places where you look like an idiot if you have a cheap bike. Here that's normal and fully accepted, like having $50 sneakers. And the great thing about a deep bike economy with relatively low-prices is cheapish insurance. It's only a few dollars per month to insure a bike worth hundreds of dollars. Percentage based it's actually not great, but you can get a really nice theft-risk-free bike including maintenance for about $15 a month in total. That's hard to beat with public transportation or a car. I wish more cities invested in their bike lanes, a bike economy is awesome. You know all those health studies about 30-60 minutes of activity per day? So many people get that on their daily routine to work, while saving a ton of cash and being environmentally conscious, while at the same time turning transportation into some kind of egalitarian phenomenon with everyone riding bikes on the same lanes, as opposed to everyone knowing poor people often take the bus, and everyone seeing the difference between who has a $1k shitty 2nd hand car and who has the $100k Tesla. I love the bike economy in this city.
Anyway, this post was written regarding the utility of a bike in a Dutch city that I'm familiar with, please let me know your side of the story in Chigago (what's the insurance costs like for your bike and what's the rate of theft, I'm most curious about)! It'll be completely different for people who race, people who buy a bike with a cultural statement about authentic craftsman bike history & culture or whatever, or people who live in cities where you can cycle straight for half a mile without making a turn or running in to a stoplight. In any of those cases an expensive bike makes a lot of sense.