I don't believe live food is always better, especially with the fish food industries ability to add nutritional elements to today's prepared foods.
And if the live food comes from substandard or crowded conditions, it may be worse.
if you raise your own live food and provide it with the proper nutrients and components like HUFA and or gut load the food with other vitamins your fish need, need that's perfect, but if you expect some small business to provide that at bottom line prices, that may not be realistic. I believe when feeder fish go for 10 cents each, or a bag of tube worms less that a buck, the profit margin is too small to expect quality in todays market place.
Worse yet is the possibility of adding bacteria or parasites from any aquatic species you might use as food. But....
To me water quality is usually the limiting factor.
In nature fish are in constant 100% water change, be it in rivers, Cenotes, or large lakes.
As part of my job, I tested water parameters for Lake Michigan, its nitrate level averaged <1ppm.
The accepted low end nitrate level in many general aquarium circles is 20 times that high. I always tried to maintain a 2-5ppm nitrate max with the use of water changes.
But experienced breeders that want max growth often change 90% of the fry tanks water daily.