One other thing I'd like to add to the good news column is that there are several companies out there selling USB test equipment at less than $1k prices, even for RF/microwave instruments! Granted, you won't get a network analyzer or spectrum analyzer for that price, but attenuators and synthesizers are available. And I saw a link to an article in QST not too long ago about how you can build your own 1.3 GHz vector network analyzer for about $400! (Wish I could find that article!) For sure the pin and ball pitches getting smaller are bad news, especially as my eyes are getting worse! Bad trend: smaller components and eyes not focussing as close!
Prototyping these days isn't too bad for most projects. Like anything, it depends on what you're trying to build and on the availability of the parts you need in "DIY-friendly" packages. SMD's are a given (I haven't played with a through-hole device since the early '90s), but not everything has to be a BGA.
Still, the modified toaster oven is a reasonable option for the dedicated hardware hacker. I've never tried it, but now I'm curious...and tempted!
Having been soldering (as well as protoboarding and wire-wrapping) up DIY electronics since the late 70's, I'd have to say that today is probably the best time for DIYers since back then.
In the late 70's and early 80's, everything was easy standard discrete logic chips, transistors and a few primitive microprocessors. Spacing was wide and wires were big. Schematic capture and layout could be quite easily done on a drafting table.
Then came the era of custom chips, VLSI and dreadfully expensive tools. It was too expensive and too complex. for most DIYers
Today, though, we have free or inexpensive CAD/Layout software, free compilers, free IDEs, free open source design examples, the Internet for research, such an incredible variety of specific purpose chips and an amazing variety of easy to use microcontrollers.
Yes, parts are getting smaller. That will become more and more of a problem for the DIY set, but at the moment, you can get a PCB for a few tens of dollars and hand solder most SMT parts without much trouble.
I would agree with the difficulty of rolling your own PCB especially when dealing with the fine pine and micro-small devices. I am sad that this is not longer possible, on the other hand what is now possible would have boggled my mind only 5 years ago. With the advent of a vast array of prototype boards and starter/evaluation boards comes power, low cost, higher speeds, and rich feature sets. It is very exciting to see what can now be done for less money, less volume, and less hassle. In those situation where a PCB must be done there are both low cost quick turn PCB services and if needed assembly services popping up on the web (more each day). Just the other day, I saw an add for a $1500 3D printer system! It is an amazing time we designers (and tinkerers) live in.