The claim that "LED gives better picture quality than LCD" is one of the most common myths in this business.
In the first place, an "LED" set is nothing more than an LCD set with a newer type of backlighting. They both have the same LCD display.
In the second place, lab tests and owner reviews demonstrate that the important factor in picture quality is the specific model of a set, not its brand or whether it uses LED backlighting. While LED technology does provide advantages, there definitely are conventional LCD sets with better picture quality than certain low-rated "LED" sets. You need to carefully look at test results and user reviews in order to make a valid decision.
So the bottom line for you, in my opinion, is no--the picture quality difference, if any, won't justify another $200, unless the specs, reviews, etc. of the cheaper set suggest otherwise.