Oh you don't have to spend anywhere near that much to make great beer.
You can do extract with just a 5 gallon pot and a 6.5 gallon bucket. It would cost less than $150.00 for everything, even less if you already have a 5 gallon kettle.
If you wanted to, you could brew smaller than 5 gallon batches and use even cheaper stuff. I do 5 gallon All grain brews, but even then my setup is more complex than it needs to be.
All that would be needed is:
1 6.5 gallon bucket with lid and airlock ($15-20)
Hoses and auto-siphons - $10-15.
1 bottling bucket - $15
1 Cooler converted to mash tun (Less than $50-100)
1 8 to 10 gallon kettle $35
1 heat source (a nice outdoor turkey fryer will do ok, and might even include your kettle) $25-50
1 immersion cooler (Can be made for less than $40.00 or bought for $60-90).
When you look at the price of good craft beer being around $10 per 6 pack you get a cost of $1.50 per beer (actually more like $1.60, but math is easier with $1.50). The total cost of equipment on the should be around $240.00. The cost of ingredients for a simple 5 gallon batch is $24.00 (assuming you use all grain kits from online supply shops like morebeer or northernbrewer, that's 48 beers at $0.50 a beer). Ingredients could be cheaper if you bought your grain in bulk and added on a grain mill ($50-100). That puts your beer savings at $1.00 a beer or $48.00 a batch. That means you need to brew 5 batches of beer to break even. The 6th batch of beer saves you $48.00.
My setup is similar to the above, only I have a 15 gallon kettle with a nice stainless ball valve and thermometer and I use better bottles for my fermentation vessel. I made my chiller and I made my mash tun. I plan to add another kettle for a hot liquor tank to make the day go a bit faster.
This is all providing you don't screw up