I used two Zeiss ZS (m42) mounts (50mm and 25mm) and an East German Zeiss Jena 35mm on my 350D before switching to film, and while I don't have a direct sense of comparison with their L counterparts, I certainly never felt the need to 'upgrade' to L.
The issue is not one specifically of technical qualities, as much as one of characteristic, and that is subjective. For my digital camera, the Zeiss Jena, which I bought for under US$200, was like hooking up a tube preamp to a CD player; not the same as analog, but warmer nevertheless; the tones had a more liquid appeal that offset any other possible deficiencies, which were few to begin with.
Of course, Zeiss is not the only option, and Canon bodies are relatively agnostic when accepting other lenses through use of an adaptor…Olympus, Leica R, and Nikon are just a few of the other lenses that you can mount to a Canon EOS body. One lens that has received considerable praise on this forum for both sharpness and bokeh is the Voigtlander APO Lanther 125mm Macro, which briefly came out in Canon mount. The Zeiss Contax 21mm, which cost around US$3,000 used, is remarkably sharp across the frame.
In regards to "expensive," I've already mentioned the price of my Zeiss Jena, and frankly, my brand new Zeiss ZS 50mm cost about the same as the Canon 1.4; I've never spent more than US$700 on a lens; how many L prime lenses fall below that? To be sure, as the Zeiss 21mm proves, some variants, even secondhand, are very costly; but the notion that all of them are esoteric pieces of glass that will require the selling of one's family is erroneous.
The caveat, however, is that you have to use them in manual focus mode and set the aperture on the lens (as other posters have mentioned since I started writing this). To me, this was not a problem, as that is what I prefer, and unlike most of their modern counterparts, the lenses retain the depth-of-field scale, which I frequently use for street photography. As also mentioned by others (I have to type quicker), build quality is unsurpassed.
Although I am a bit of perverse case, it would make little sense for me to pay for auto focus when instead those funds could be directed at purchasing an extremely well crafted lens designed for manual.
This issue is not which one is better than the other, as much as the fact that competition exists. That said, if you are looking at 200mm or longer, then L is the likely choice…if anyone wants to dispute this, please do; I have no loyalties to the L brand.