I bought a Azumi silver plated flute about 2 years ago for £1000 and it has visibly tarnished, to the point that I am regretting buying a silver plated flute. I often use silver polish cloths to mask the tarnish. If silver plating ruins so easily then what was the point of buying something so expensive for an upgrade? I also have a Buffet Crampon series 2 flute and that has not tarnished at all for the past decade, perhaps because it is made of some kind of cheap cupro nickel material. I have eczema and use creams frequently, this may be contributing to the tarnish, but I have no other choice. Should I sell my silver plated flute and use a student flute instead? I am scared that further tarnish will occur with additional usage and this will make the flute unpresentable.
Silver polish does not "mask" tarnish but rather restores the silver when it is not thoroughly corroded: tarnish is silver sulfide and a proper silver polish will let the sulfide escape again (leading to a smell of rotten eggs).
While I would not bother about the flute being "unpresentable", it does make sense to not let the tarnish proceed to far. You need to use materials explicitly designed for polishing silver though: you don't want to remove but convert the tarnish or you'll lose material by and by.
The point of a silver plated instrument instead of a lacquered "student model" is not for visual aesthetics, but rather because the vibrations in the metal that accompany note production are damped slightly by commonly-used lacquer finishes, which have more of an undesirable effect on the instrument's timbre than silver plating does.
Unfortunately I cannot point to a study that is directly applicable to this case, but in general this is the reason laquered finishes are typically found only on cheaper instruments.
With many brass instruments (I'm not sure about with flutes or other woodwinds) it is common to see players strip the laquer from higher-quality laquered instruments and leave the horn totally unfinished. Renold Schilke, a well-respected maker of brass instruments who experimented with many materials and processes for building, had the following to say (reported at http://www.dallasmusic.org/schilke/Brass%20Clinic.html):
First, I tried to find myself three instruments that played absolutely identically. One, I silverplated, one I had a very good lacquer job put on and a third I left in brass. Now recall that all three instruments played identically the same in brass, or as close as it is possible to get. I had various players from the Symphony working with me as well as other professional trumpet players in Chicago and they agreed unanimously on the results. The findings were that plating does not affect the playing qualities of brass instruments. That is, the plated instrument and the plain brass instrument played identically. The lacquered instrument, however, seemed to be changed considerably. This instrument, which originally had played the same as the other two, now had a very much impaired tonal quality and the over-all pitch was changed.
To explain these findings as to why the silver and brass instruments played alike and the lacquered instrument did not, let me give you some figures. The silver plating on a brass instrument is only one-half of a thousandth inch thick. In other words .0005 inch. The lacquer that goes on, if it is a good lacquer job, is approximately seven thousandths of an inch thick, or .007 inch. Now to get an idea in your minds as to what these thickness figures represent, an ordinary piece of writing paper is approximately four thousandths of an inch thick so the silver that goes on an instrument is only 1/8 as thick as a piece of writing paper, while the lacquer is almost double the thickness of a piece of writing paper. The silver in itself is very compatible to the brass. The lacquer, if it is a good lacquer and baked on, will be almost as hard as glass and not at all compatible to brass. The lacquer on the bell of an instrument is seven thousandths of an inch thick on the outside and another seven thousandths on the inside which gives you a total thickness of fourteen thousandths or .014 inch. This is already the thickness of the metal of my instruments so the lacquer process would double the bell thickness. As you can see, it is bound to affect the playing quality of the instrument.
You might try experimenting with different brands/formulations of silver polish - in my experience some of them leave the silver more resistant to further tarnish than others.
Tarnish won't affect tone. Your flute should go into a technician once a year for a tune-up. They'll disassemble your flute and place it in a tank of solution that safely removes tarnish. I never use any sort of tarnish remover or polish on any of my flutes. I consider it destructive. Rampal's flutes were all but black with tarnish. It's cosmetic. If you want to slow down tarnishing, wrap your flute in old-fashioned carbon paper (available at Amazon and at Staples) when not in use. Carbon stops tarnish. For silver flutes, get a blue polishing cloth (my Azumi came with one), don't use any polish, but use the blue cloth to carefully wipe down your flute after each use. Do not mess with the mechanisms.
I had this problem with the first flute my parents bought me too, an Armstrong silver-plated model. Some people's sweat simply corrodes (oxidizes) metal more than others. The only thing I know you can do about it is to wipe the flute off carefully every time after you play it.
Silver will eventually tarnish even so because of the atmosphere, and that cannot be prevented, only controlled as already suggested, with silver polish that reduces (the opposite of oxidizes) the metal.
You seem to think, that your flute was more expensive due to the silver-plating. Given that an ounce of pure silver is somewhere in the 20$ range as of today, this can easily be questioned.
There are so many more criteria, which cost money, like the precision of keys, material of the head, effort on fine-tuning, e mechanics, offset g, ...
So even if you are unsatisfied with the outer surface, you can be sure, to have a not only substantially but even considerably better instrument.