There are no absolutes.
It's a matter of what inspires you, what you can afford, how you like to work, etc.
IMO, Where hardware makes the most difference is on the font-end (recording) side.
A world-class Channel-Strip makes everything you plug into it sound better.
One of the best musical purchases I've made is getting a Neve Portico-II.
It was like getting an upgrade of all my mics and instruments.
Was searching for years for a great DI bass tone. Boom!
Straight off the preamp, zero EQ, maybe slight compression... the bass just sound great.
Condenser mics that could sound a bit strident with lesser preamps suddenly sound balanced/amazing.
If a piece of gear inspires you (hardware or software), use it.
The best software emulations are pretty good.
That said, I'm not sure anything will ever beat the original.
As great as sampled drum-kits, pianos, etc have become (and they're amazing), if you have the space for the real-deal (and the know-how to record/mix it well), it's almost always going to come out sounding more "alive" (fill in your favorite positive adjective).
To tie into Bat's point, we all have to live within some type of means (even if you're a rock-star/wealthy).
Many (most?) of us would like more/better gear.
At the end of the day, the gear is but a tool.
It's down to the individual to make music.