Film cameras of comparable level were cheaper. E.g. my Rebel G was $240 in 2001 (with a kit lens). I believe Elan 7 body could be had for $500 - this is at least the equivalent of today's 7D. So the film cameras were about 1/3rd of today's cost, at least. Part of it makes sense considering that there was no processor inside, and I bet the electronics were much simpler. And the film cameras didn't get obsolete as quickly, as long as the metering system and AF worked well. My then-20 year old Zenit ET camera required more work (focusing was manual, and exposure had to be read off of a built-in meter and then dialed in manually). But it still provided me with a metered reading and the final result when using the same film and the same lens was as good as Rebel's. Basically, as long as I was not doing shoots of a fast paced action, I could use a 20 or even 40 year old camera in same exact conditions as a then-modern camera and get the same exact results with little extra work of dialing in the meter readings manually. The only reason I went with Rebel was for AF and built in flash, both of which are very helpful when taking photos of kids. And in the hindsight, I'd be better off buying a cheapo used battery-operated external flash with a cable sync, and investing in more M42 lenses instead. Other than some convenience features, these two cameras 20 years apart were on the same level. A lot of what is today handled in the body, was handled by film back then, so all you had to do to "upgrade" was pick a different roll of film.
Now, try to get the same results at ISO1600 using a 1 year old T3i and a 6 year old XTi ($630 back in 2007). Or at ISO6400. How about the changes in dynamic range between today and say 5 years from now. The overlapping areas in which the 5 year old technology gives you the same results as the latest and greatest technology are getting smaller and smaller. So while you can still get excellent results with XTi under same conditions today as you could in 2006, you just can't match T3i's useability range. And as long as technology keeps improving, 20 years from now (if the electronics in your current body survive that long) your camera will be only useful as a conversation piece. So yes, we save on cost of film, and get a greatly improved ability to learn quickly and manipulate the final output on the cheap, but we pay more for hardware upgrades and they are more frequent.