The first digital camera I used was a tiny point-and-shoot my dad bought for something like $1,200. It had less than 2MP, auto modes only, and roughly 90 minutes of battery life. When I say "used," I mean that I took a test shot and immediately went back to the 35mm Pentax Spotmatic II I was learning on. As an easily-distracted whippersnapper (roughly 12 at the time), I didn't take to it that well.
Then my dad upgraded to the original Canon Digital Rebel, one of the first DSLRs below $1,000. I swiped it (and the 18-55mm f3.5-5.6 kit lens) about 2 years ago when I started urban exploration, and got serious last year. But some of my favorite shots (all lower-ISO stuff) came from the Rebel.
I actually returned to re-make this shot with my 18MP 60D and a RAW work flow. Ultimately, the result wasn't as much improved as I thought, and exactly recreating one's old work with only technical improvements is pretty pointless, so my heart wasn't in it. So, even for this huge nerd, the technical advantages were not sufficient to justify the effort of returning with a better camera.
On the other hand, my current work would be nearly impossible with only the Rebel. Flash controls and high-ISO performance have come quite a long way since 2000.
Robin, I think your post was excellent, and I'd like to expand a few points.
I think these people had a point until digital cracked roughly 6MP. Earlier for journalism and other quick-turnaround applications. Film remains the best way to make truly huge images. Which is a concern for probably one photographer out of every few thousand.
I think it's far more common (and sensible) to stick with film because of the way it makes you work rather than any quality differences. Greg Heisler probably doesn't need an 11x14in negative for most of his photos, but that's his process, and he sticks to it. My digital cameras still get the most use, but I like the slower workflow my dad's Zenza Bronica ETR-Si requires. So much that I asked my favorite used gear store to keep an eye out for a Sinar F2 (4x5in large-format studio camera). Glutton for punishment, apparently.
Quoted for truth. Composition, timing, and aesthetics will never depend on the camera you're using.