For me it's not a prejudice, it's a conclusion. I've downloaded gigs and gigs and gigs of net label stuff over the past ... I dunno, must be closing on 10 years. And, yeah, taking away the costs involved with releasing music is necessarily taking away a big incentive to be critical with what you bother to put out there.
The exceptions are where people still want to be cautious for curatorial reasons, i.e. want their label to be really refined and something special, etc.
I wrote a primer for a bloopy electronica webmag a few years back, but don't want to show it to you.

I do a
weekly free mp3 link thing on my blog, and at least a third of the mp3s I link to are net label things as opposed to just band site giveaways or what have you. My tastes seem to be softer / more polite than those of a lot of bods on here, but you might find some things you like.
I think
Jahtari gets over the competent-but-not-awesome threshold as often as most physically-releasing labels.
Zhao, you might like
con-v for microsound type adventures?
Zymogen and
12k off-shoot term. put in the effort and generally get great results, if you like crackly contemporary ambient type business.