Not really sure what's so crazy about that. A brick and mortar shop will spend way more than that on renting a good location for their business when they have no clue whether they'll turn a profit. This is just the digital equivalent of that. People trust authoritative domains like vidaliaonions.com way more than something like vidaliaonions-direct.net and they're given more SEO weight as well. At least I know that used to be true; not sure how true that is today but I'd imagine it still is.

You believe brick and mortar shops put money down on a location with no plan at all? This is what OP did, your analogy is pretty weak.

Yeah, exactly. Go price the equipment it takes to rig out a new upstart plumbing biz (trunk/van, all the hardware, insurance, etc). Startup web businesses is insanely cheap, even with a couple grand on a domain.