What really sparked my interest was having WiFi in a chip that only cost maybe 2 usd at the time. Plus, you could find great usb dev boards for less than 5 usd.

If I had this stuff as a teenager, I would've lost my mind...

Yeah, important to remember that the old Wifi module for the Arduino was like 20-30 bucks and was basically just an AT modem that still needed a host Arduino. Barely anybody ever used them that I saw. The original ESP-01 for a couple bucks was a very exciting product for hobbyists just as a serial-to-wifi adapter even with minimal English documentation, and then it went bonkers when they released Arduino support and a package with enough IO to do useful things. Espressif has also been pretty nice to the hobbyist community in general once they realized what they had done.

The first time I saw a 8266 I thought "why am I struggling with Arduino or Raspi if this thing is all I need to make a sensor + wifi mesh". Also being powered through the USB is a plus, lots of unused USB ports around in 24/7 machines.

Agreed. Hobbyist (and retired professional here) who fools around with IoT stuff at home. I've done lots of things with Raspberry Pi Zeroes that can be done with an ESP8266/ESP32 and with the benefit of on board analog inputs. Some of the devices I've used (like the Bosch BME280) seem to work better on the ESP and I suspect that's because the serial communication does not suffer from the risk of missed data due to managing the protocol in user space. The ESP is easier to program for real time either using FreeRTOS or just bare metal. Espressif's SDKs are a bit cumbersome to install but the VS Code extension helps to manage a lot of that. And it all works well on Linux.