I 99 I started leasing a dedicated server - 200mhz with 128 megs for $100/month with decent bandwidth and transfer for my needs (10 gig/month to start with). I was able to put together quite a lot of projects and host them for that $99/month.
So, yes, undoubtedly things got cheaper, but not everyone was having to shell out $50k just to get any website up. I actually did a number of projects that would sometimes get sustained traffic (from usatoday, yahoo finance, etc) and had little problem on hardware that was costing perhaps $500/month.
Yes, it was the era of large VC funds pouring money in to lots of hardware/licensing - of course some people paid because it wasn't their money in the first place.
During the same period, I was also working at a company that had several multi-million dollar sites in development - massive budgets, hardware, project teams, etc. Heady times for sure. I got to see both sides of the fence at roughly the same time. Clients that had the millions would go to the agencies or hire top talent. Clients that didn't would still get their stuff done - it wasn't as 'all or nothing' as people like to remember.
MySQL was a viable option for us -- in fact, it beat Oracle in just about every benchmark we could dream of. Sure, it didn't have referential integrity, but we didn't need it.
Also, we were using Apache with a few scripts, no need for vignette or any other weird stuff.
Things are getting cheaper, but they were always reasonably cheap if you knew what you were doing, AND didn't try to follow buzzwords or have full ACID properties for your instant messaging status updates.