You can serve insane amounts of users on a single $200 a month server from Softlayer (or EC2). It's not uncommon for many types of businesses (that charge real money) to do $250k-$1m in revenue a year per server as powerful as that.
Some types of free services that go out of their way to build traffic at the expense of revenue, or computation intensive services like real time audio/video may be exceptions to that rule.
Some anecdotal evidence - I ran a cacheless Django site that more than made the server costs back monthly via a single Adsense unit, in the gaming sector where eCPMs are rubbish, and the files you serve are huge, and the server was never at any point at more than 20% utilisation.
By and large, the cloud has lowered the barriers to entry. Unless you're running Justin.tv, server costs are down in the noise. Getting users is the hard part; serving them pages is not.
A cheap PC today is way more powerful than PCs of just a couple years ago. Server rooms have shrunk not just because of the cloud, but because the same amount of work can get done with less machine.
John Carmacks quote becomes more pertinent as time goes on because computing power is only becoming cheaper. And to directly address your point, the common person now has access to more computing power than ever before at a cost lower than ever in history because of the cloud.
If anything the barriers to entry continue to drop leaving only our lack of persistence as what stands between us and success.
>Server rooms have shrunk not just because of the cloud, but because the same amount of work can get done with less machine.
The demand for servers and compute power has increased because of the cloud. Just because server rooms have turned into datacenters does not mean they "shrunk", quite the opposite.
When I started at my previous company we had a server room that was full of computers. When I left we had consolidated to a single rack, and nothing had been moved to the cloud. While the companies demand for compute power went up during the time I worked there, the compute power available in a single machine went up faster than the demand.
Cheap PCs in your basement, or cheap VPS machines are perfectly acceptable for starting out. Also, if you're conscious about performance and have good bandwidth, you can serve insane amounts of traffic from a single server.
