As my wife is in a tipped job in these sorts of establishments, we've done a lot of talking about this issue, and here's where I've come down.
We're in a perverse incentive spiral. Tipping started as generosity, a nice thing to do once in a while, then it got used by the restaurant industry to carve out an exception to minimum wage laws, which means waitstaff get paid far less than minimum wage. Now, no one competent is going to do that job for anything close to minimum wage, and a good server or bartender in our (fairly poor) area usually pulls down $20-$40/hour averaged out. That's what you have to pay good, professional staff to put up with the American public.
So, we have a hidden price structure which involves guilting decent people into subsidizing cheaper food for assholes. You tip 20% because the price of your meal is ten percent higher than listed and half the customers aren't tipping (math very rough).
The other subsidy is from the IRS, because virtually no one accurately reports their cash tips. While I don't begrudge people screwing the IRS a bit, it's a funky way to pay people more by winking at tax fraud.
I should say my wife likes tipping, and wants to keep it. I've listened carefully to her descriptions and complaints over the years, and have come to support banning tipping. along with removing the carve-outs for the restaurants. The whole system is based on tipping, it has to be removed completely to work.
Here's the bottom line. Taking into account the tax laws, servers and bartenders would need to start at something like $15/hr and get relatively rapid raises to around $30/hr rate to make what they currently do. I support putting those prices on the menu, rather than relying on social convention to make up for free riders.
However, until tipping can be uprooted entirely, not tipping just means you're screwing over the people serving you. Yes, the system is bad, but you won't make it better by cheaping out. It's not principled, it's just meanness.