The biggest part of the problem is that those who created the online businesses were so obsessed with keeping up with the technology (constantly upgrading connections, hardware, software) that they forgot about what their core buiness was (selling pet food online, selling music, selling computers whatever)
They bought all this equipment on credit from companies like Dell, Nortel, Cisco, @home. Then when the companies that sold the products went under, so did the companies developing the technology. Those creating and selling the technology established a very questionable practice of vendor financing, where Nortel would lend hearts4you.com the money to buy Nortel routers, cables etc. hearts4you.com goes under and can't payback Nortel, we see what happens.
The Internet is all about enterprise business development now. It used to be about selling to individuals, now it's about selling to companies. If you look at initiatives like Microsoft's .Net which uses XML to allow companies to communicate instantly with vendors via the internet to update inventories, prices...that's where the Internet is going. Allowing companies that have some sort of relationship to seamlessly move information across a variety of platforms (especially databases like Oracle, MSSQL etc)via XML
There will always be places for freedom of expression, mad designing and of course our wonderful Tribe, but someone's got to pay for it all and the original 90's business model didn't work.