If you spent $5 on electricity but only get $3 of XMR you're losing $2 of XMR you could have bought on an exchange. That's is completely irrespective of owning a miner or not.
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If your goal is to make fiat money from crypto conversion, then it never makes sense to mine at a loss. NEVER.
I see your point and it is logically valid. Howerver, mining is almost never irrespective of owning a miner or not. It does make sense to simply buy from an exchange, but you may not be considering the factor that people who already have a miner, are already too invested to accept that they have lost. People who are mining at a loss are probably still in denial or are too lazy or passive to realize that they need to sell their equipment.
I made a long post in another thread somewhere a year ago about how mining only pays off in the long run (ie 2-5 year span) if the coin is expected to be a failure. If you expect the coin to succeed - you should always buy the coin outright at the start. Buying the coin gives you the opportunity to sell in the event that you need the money (like lots of noobs panicking here because they put liens on their cars or houses to pay for mining equipment). You also tend to get more coins that had you mined.
People who already have a miner - well owning a miner doesn't mean you should compound your mistake by mining at a loss. Again these idiots lack critical thinking skills. They think by not using the miner they're letting the miner go to waste. But again, refer the the example I gave - why only get $3 of coin with $5 of electricity. Only reason would be to support the coin or for people who can't buy off an exchange or people who want to hide their coins.
People sitting on underwater hardware need to decide whether to sell or hold onto the hardware. If they sell they can buy the coins with the proceeds. If they sit on the hardware maybe they can use it again later when mining is profitable. That's the only choice.
It never makes sense to mine at a loss to fiat.
But people chasing money out of greed (instead of a desire to improve themselves through learning and the experience of mining) will do what all the other sheep do and keep on mining. I am a physician and I see everyday the stupid stuff humans do to their body after being told repeatedly not to do destructive behavior.
I sold my Antminer S3s a few years back after I actually made more in BTC than the miners costs at the time of purchase (yeah Bitmain doesn't do that anymore - that's why they are pretty much crooks in my book). I might have only got a hundred for each one, but I bought BTC with those proceeds and got more BTC than the person mining it could ever mine to this day. Sure the person who bought them saw BTC rise to $22k from the $150 or so BTC was back then and he did well - but I did much better by putting my money into the coins.
If you have a decent job I would just try to focus on selling all unnecessary "junk" or working overtime and just buying the coin you want. I think prices will continue to go down or sideways for another year - this is 2014 all over again. But you can't time the market unless you make the market like Roger Ver.
It is all about making the right decisions. I did a detail calculation few comments ago that it was actually more profitable to buy mining rig year ago then buy eth and hodl , you would mined 10 eth in one year with one mining rig 3k worth, where is you have bought it at this stage you would actually lost.
Ofcourse if you keep mining and crypto never recovers you would be in loos, same as if you buy coin now every day if your rig is switched off. So think there is no point of switching off if you want to accumulate more coins. Because if you have electricity at decent price under 10c per KWH , coin cannot go much under production cost, none wants to sell their coins at loos. Only bunch of scared noobs. If no miner sells coins there is no inflation.
Its simple ecanomics , now there is demand less then there is supply. If the supply decreases , price starts to grow.