ANECDOTE - professional musicians left out because you have to pay them

I was recently asked if I was interested in playing at a local street festival. It's going to be a great event and I was thrilled to have a shot at a spot for my (underexposed) band. When asked for a price I quoted "scale", the lowest amount set by our professional association for this type of gig, a concert set on a festival street stage. Scale amounts to $135 per musician. This is more than fair for the employer.
In response to my quote, I received an email back informing me that this was way outside of their budget and that now they had decided to get only "community bands" and "non-professional musicians" to play at the event. In other words, people they don't have to pay or who will work for almost nothing, musicians with day jobs etc.

Again, the professional musician is eliminated from the pool of work.
Where is the professional musician supposed to work?
How are we to make our living?