If you're running a discussion forum that you share with 50 friends, sure, it can be in the first category and you can do it for peanuts and enjoy all the high quality interaction you like.
I disagree, let's have a look at Disqus, who (according to here) have around 100 servers total for serving (in 2011) "500 000 sites" with "15 millions of registered users" and "17 thousands of requests per second" for "250 million visitors (for August 2010.)".
A later blog-post from Disqus itself puts that in perspective.
[Disqus] Recently hit two million concurrent users with 5 servers. Hit peaks of ~950K subscribers per machine and 40 MBytes/second per machine with the CPU usage under 15%. [source]
Let me re-iterate: they're handling 2M concurrent users with 5 servers!!
Granted, they don't use VPS' for 5 bucks (and they use more than those 5 servers), but what they're paying could be considered 5 bucks if they were playing in "our" ballpark here. Another interesting tidbit from there:
5 push stream servers were required because of network memory limitations in the kernel. [...] Otherwise could run on 3 servers, including redundancy. [same source as above]
Ergo, a lot is possible, if the architecture is right. (If you're running slashcode, of course, then... well...)
I also run some commercial sites, aiming at a wider audience, charging real money for signing up. [emphasis added]
Great! So you've got users who pay for the extra effort. My post was referring to that guy who was arguing that the internet needs ads, because everything is so expensive, which I still think is utter BS.
But running a significant news or social networking site with thousands of participants? Not even close.
I don't know about social networking, but news sites can be made static, cached, and hosted cheaply. I don't have metrics here, but I think it's safe to assume that if Disqus can serve 250m visitors on 100 servers, you'll be able to serve a million and more on one; especially for a static site.
Also, I've implied a counter argument to MojoKid's statement that "The internet is no different than any other media," in the sense that you don't need to buy several Heidelberger's for a couple hundred thousand or more to start a news site. The upfront investment is almost totally negligible and a small percentage of subscribers is enough, once you hit the limits of your initial infrastructure. And when you do hit the limits, in most cases [educated guess], you will have some users willing to pay.