First of all, the Sparc 1 was pretty ancient 10 years ago. In 2000, Sun was barely even selling anything but sun4u based machines. I think they still sold a few sun4m machines like the sparc 20, but it certainly wasn't state of the art.
In 2000, the technical reason you bought Sun or SGI over a Pentium III running Linux was the I/O subsystem. There were also political reasons, like you wanted VC. Remember, that was the height of the dot-com bubble, and it looked better when they toured your office to have a bunch of Sun stuff in the server room.
Yes, The Pentium III could run Seti@home just as fast as a Sun, but there was no comparison in the I/O subsystem, which was, and still is, what most servers need to do fast. Linux hardware RAID support was spotty at best. LVM existed, but wasn't as good a clone of Solaris as it is today. This was also pre-HyperTransport. PC (Intel and AMD) bus technology was years behind Sun/DEC/SGI in those days, the CPUs were fast, but they couldn't get data to them fast enough.
More recently, all that has changed. Every RAID vendor supports Linux, and most do it well. PC busses designed for servers use similar architectures to older unix servers, and have ramped up the speeds (Intel hired all the DEC engineers). A "PC" based server, engineered by a company that knows what they're doing (ie not some gamer building a server optimized for FPS) can definitely compete with anything out there on the technical level, and it's got the backing of real vendors behind it, which is needed in a corporate environment.