I paid $199 for a new Linux PC last year when my 4 year old Linux server died. Increasingly, deploying web applications is a reasonably simple process of integrating the right Open Source Java infrastructure tools (for me, these are usually Tomcat, Axis SOAP support, Joram JMS, etc.) and some custom application specific software. In my Java consulting business, it has been several years since any customer wanted to deploy on anything but Linux and free Open Source infrastructure software.
Robert X. Cringely recently wrote an article about the (roughly) $70 Linksys WRT54G 802.11g wireless access point and router that includes a four-port 10/100 Ethernet switch. He points out that Linksys uses Linux in this device, plays fair by the GPL, and publishes the firmware code for the device.
I like the idea of supporting light weight web applications, etc. on such a low price, compact, and low power device as the Linksys WRT54G! Too light weight (too little RAM, etc.) for Java, but it is simple enough to write useful socket server based applications in C or C++ and support HTTP, REST, etc.
Lower development and deployment costs simply mean that companies and other organizations can afford to provide more service, use better internal business intelligence tools, etc. I like the trend of spending money on custom web application development (whether it be to programmers in the U.S., India, China, Rusia, etc.) that is saved in hardware and infrastructure tool costs.