If you get to know how people do their recording you'll find out that
the gear they use is the gear they can afford, modulo the work method
that's comfortable.
As for 'can you make brilliant music with nothing but a computer?'
question, I'll self promote again and put my tracks up for inspection:
http://soli.inav.net/~kent/music/
I don't know if it's brilliant, but I make music that I want to hear,
and I like to hear a lot of the same stuff that the rest of y'all do.
which has loads of tracks produced on a computer with a cheap sound
card and no other hardware. Software is another story -- it's just
as expensive as gear.
I'd make this recommendation for anyone wanting to get going on the
cheap: Digital Orchestrator Pro from Voyetra (www.voyetra.com). Under
$200, easy to use, and works brilliantly in the domain of assembling
tracks from bits and bobs of samples. That and a registered copy of
Cool Edit Pro, and you're good to go.
There's a whole universe of sound out there that you can twist, distort,
chop, filter, and mold into music with just a computer. And it doesn't
have to be soul-less. Far from it.