I'll rather dangerously weigh in here as you've mostly heard from mixers. As a production company owner and also an evil RED owner I have a slightly different take. We originally tried to hire sound mixers on every job and, like you, really just couldn't afford it on lower budget stuff (guys, you don't even get called). Great audio is crucial to me. But with most of the good guys here in Atlanta we're competing with major studios for sound mixers with decent kits.
We still hire sound mixers and pay them full rate when we can afford it. But mixers with their own gear in this town aren't cheap. In fact, they can be the highest item in the budget. Many of them have over 100k in their kits so why would they work cheap? Inevitably, we end up in the situation on many jobs where we have to trim by hiring a less experienced guy and have him use our gear. Yeah, we're not Warner Brothers and we're not a signatory company.
As far as gear. First we tried to go cheaper with a cheaper kit. Example being a Tascam HD-P2 which was one ill-fated purchase. In the end, after a couple poor choices dumped on the auction site, we invested in a 633. There's nothing like a Sound Device for dependability and clean preamps. We also own some older Lectros, a couple C460b's (CK61 caps) which is an awesome but not well known cardioid solution, Sankens and a 416T, plus a bunch of other single purpose mics and misc lavs. I also recommend buying industry standard gear on everything. That way, anyone with experience can use it.
At this point, we have a significant investment in audio and I don't regret it one bit. I can hire a mixer and pay him for his kit, pay him to use ours or I can mix myself, and get clean audio, if I absolutely have to because the budget is so awful. It's a lot easier for me to find a competent person to run my camera on budget than it is to mix audio.