Recording is just one aspect of the hobby, the other two aspects are songwriting and performing. How much money and energy you spend in each area should be driven by the kind of music you want to play and record, and how well you need the end product to sound.
My low-end studio, with all of what I would call "essentials", cost me around $3,000. This is divided pretty evenly into three groups: basics (recorder, mixer, speakers, headphones, cables, etc.), signal chain outboard hardware (compressor, preamps, reverb/effects, eq, etc.) and microphones (including stands and other mic accessories). I'll definitely be spending more money on acoustics going forward.
(Then again, I have another $3,000 or so invested in instruments, so I guess that tells you where my priorities are.)
If someone can record music for cheaper with a USB mic and software, and feel good about it, then they should do that.
But: if your goal is to create music that sounds like it comes from a professional studio, a USB mic running into a laptop is simply not going to cut it. No amount of post-processing, software or otherwise, can truly fix a bad recording from cheap hardware.
For me, this hobby isn't an exercise in minimalism. I'm happy with my gear and the quality of music I can record it. I think I have everything I need and want to have, for now (until GAS creeps up on me again!). That includes all the little things, including pop filters, a music stand, a patchbay and a good chair, lots of guitar pics and a few effects pedals. I don't strictly "need" all of these things, but they do all contribute to my enjoyment of home recording.