Cheapest place in Thailand to dive is without Doubt Koh Tao. Having said that it is far from the best diving Thailand has to offer, and far from the nicest location. Boats can be crowded, and as Limbo raises the important point of customer safety often can come second to financial considerations.
In agreement with parts of this, but as for 'far from the nicest location', not really sure how you reach that conclusion? Have you ever been? Koh Tao is a tropical island, with several nice beaches, secluded coves and rocky bays. And in terms of development, it is much quieter, significantly less westernised, has less 'girly bars', and is generally less tacky on the whole than the other islands in the gulf (Samui & Phangan) and west coast destinations such as Phuket. However there is still with a wide variety of accommodation types, restaurants and bars to choose from. Its subjective of course, but as far as locations go, its actually very nice!
Dive location wise, we'd agree that Koh Tao is by no means the pinnacle of what is available in Thailand. But its not exactly bad diving either, and the low cost and pure variety of dive sites (around 50) means that there is still plenty of options for divers. Incidentally, the reason for the low costs of dives here has nothing to do with quality of the operators or diver safety, it is a direct reflection on our running costs. The vast majority of our dive sites (with the sole exception of Sail Rock) are in very close proximity to the island, with the longest boat journey to the next furthest dive site - even on one of the old wooden boats - is only about 30-40mins. To put that in perspective, we cover it in our speed boat in about 15 minutes. So fuel costs are much lower than in other locations, and this saving is passed on to the customer. Safety standards should not be in question at all. Standards in Koh Tao are actually incredibly high, especially compared to many other south east Asian destinations.
Agreed, some dive boats can definitely be crowded, and with many operators keeping their departure times virtually identical, dive sites can also be busy. But by doing a little research and shopping around, its not difficult to find companies like ourselves that offer small group diving on faster boats at off set dive times to avoid those crowds.
I'm not trying to start a pro Koh Tao campaign here, or convince 'whysocold' that this is the location for him. Just pointing out that some of your comments are misleading/inaccurate in their assumptions. No offence whatsoever intended in this response