Since this discussion is veering back and forth between being on-topic, I suppose I can throw my two cents in.
I am both a professional and hobby FPGA developer. At work, I get all kinds of fancy Virtex and Stratix parts to target. At home, I have a Cyclone II 2C35 (on an Altera DE2 board) and the Xilinx sample pack I got for free. Both use free tools from Altera and Xilinx respectively.
First, the silicon is interesting, but not terribly hard anymore. The basic features are common to all manufacturers. The real magic is in the mapping and PAR. Why else would someone pay for Synplicity software? Thus, the software tools that Ron disparages are probably worth the money considering what they do. I recognize that, and accept that it costs money to keep the tools up to date.
That said, I wish vendors didn't feel the need to disown older parts when it isn't difficult to keep support as an option. I can still output from Microsoft Word to all kinds of strange, esoteric (and ancient) formats. Why can't Xilinx allow me to use the latest ISE to target strange, esoteric FPGA's? Simply make it an optional component. At the very least, let me download a support module from your website - if putting it on the DVD is too much trouble.
As it stands, at work I have to keep a copy of ISE 4.2i, because it is the last version that supports the XC4000E series FPGA's - and it doesn't play well when install alongside 7.1i - which means a dedicated terminal just for 4.2i. This is BLOODY FRUSTRATING. I realize the parts are old, but they are still out there - and designs do occasionally need maintenance. BTW - Austin was bragging about a lot of military and space applications. Guys, we actually support those designs for more than 5 years. It would be helpful if your tools did as well.
As for the cost issue, the webpacks cover all but the high-end parts. I have found them perfectly adequate for home use. I'm actually impressed that Xilinx or Altera offer free versions at all. Seriously, you get a VHDL/Verilog compiler, limited simulation, mapping and PAR - for free? That's almost absurd. The only tool I don't have at home is Synplify Pro - I end up using Quartus and XST.
As a fairy tale wish, it would be nice if there was an academic pricing plan that could include guys like me that want to develop at home, without having to run to the office to compile something. Yes, it is a different market - but with just a little forethought, you could offer great pricing to students and hobbyists, while retaining the high-end corporate accounts. I would gladly pay several hundred for a _perpetual_ license that had restrictions on what commercial activities were allowed, yet let me play with the larger parts on boards from Digilent, BurchEd, etc. (I would even be OK with the software being tied TO the boards - maybe lock on the FPGA serial number via JTAG or something)
Much like the GPL, if you want to do something outside the license, like start a business, you cough up for an unrestricted license. Yes, there would be a trust element, but since you are also the manufacturer, it wouldn't be difficult to see a spike in part orders.
Something to think about - since I know I would like to play with the Virtex parts with embedded PPC cores - but can't afford to ante-up to the full package.