I often have similar conversations. When I was starting off I used a couple of Skytec speakers and some Acme Firebird lights and people enjoyed themselves, I have invested in kit over time but don't think people enjoy themselves any more.
What made me realise this is I offer a 'free disco' after my Race Nights. Basically I turn the music up and have one of the aforementioned Acme Firebird lights sitting on the floor underneath the projector. Quite often sound comes from 2 8" W-audio speakers. People dance, people enjoy themselves and I have actually had wedding disco bookings purely based on this.
High end corporate events are different, but for parties, weddings etc I think the only people that notice anything other than how tidy the setup is are other DJs. In fact over Xmas I am going back to using the Firebirds