I understand what you're saying.
The question you've got to ask yourself is "Do I want to finance my hobby or do I want to make a living out of this?" Your honest answer dictates the direction you need to take.

If you've identified a potential market, then the question arises "Do I have rivals and how do I get the jobs away from them?". If you intend to take the work by dropping prices, then expect aggro from your competitors and contempt from just about everyone (including your customer). If you intend to offer a better service, then no-one can complain (providing you don't do it at ridiculously low prices). If there is a gap in the market, then you have to go into "business mode" and make sure that you do your sums.

Let's say a mate asks me to do a video of his band in a live concert situation. I'm going to need three cameras (absolute minimum) three operators (unmanned cameras don't count towards the number) a soundie and a gopher. Rental for the gear, paying the crew and transport costs mean that I ask for a grand and don't earn a penny myself. No-one can get upset because he wouldn't have got a "proper" production company to do it anyway. He's a mate so I'm happy(ish) to work for nothing.
But...
If it were a commercial production would I be prepared to supply transport, organisation, collecting gear, prepping gear, production management, operate a camera, return rental gear (wear and tear on my own gear) edit, supply the edit computer, and all the other stuff which making a dvd entails... for five hundred quid?
Not bloody likely, that works out at an hourly rate less than the guy who cleans the floors at McDonalds.

See what I'm getting at?

I can reveal a secret which nobody believes and yet failing to understand it is the reason why so many videographers fail in their businesses:
"The quoted price is not the most important consideration for the serious customer."
If you deliver a crap product, it doesn't matter how little you charged, the customer will not be happy.
Any halfway experienced marketting department knows how expensive video is, and will not treat you seriously if you offer a lower price. so offering £1.5k will just get them to say "No" but quoting £15k will get them to say "Can we discuss the price?"

So, are you worth less per hour than the floor-cleaner at McDonalds? (Forget the moral considerations, this is business) Just because the band only earns £500, does it mean that your skill, experience and effort is worth less?

Finally: (and here comes a "Guru" moment) There are many skilled amateurs out there. Millsy, my Premiere and Audition expert is an amateur and he knows more, and gives better advice, than most pros. So, being labled an "amateur" isn't an insult.
Being labled a sloppy, crappy, slapdash undercutting semi-pro... That's an insult.