The cost of the cards is part of the game's balance. If you could just pick any cards you wanted with no regard for rarity, then the game isn't Magic anymore.
I play online as well, using the official client, and you still pay for cards.
It's true, but all of the people who grew up with MtG as kids now have jobs/parents and enough money. When I started getting back into things, my friends made me play one of their decks in a standard qualifier tournament. Damned if I didn't play four of seven rounds against nearly the same blue/white deck. Money cards: Detention Sphere, Sphinx's Revelation, Supreme Verdict, Elspeth, Jace, Mutavault, Hallowed Fountain (and now Temples of Enlightment, too). So many people running around with minor variations of a roughly $400 deck. Throw four Archangel of Thune in the sideboard, too and you can push $500. I mean, I'm frustrated because that day was so stupid, but in competitive play that balance becomes pay-to-be-remotely-competitive.
I certainly see a lot more high-end decks now than I did back in the day, but I still see quite a lot of decks that could probably qualify for Pauper too. There's a bit of a hierarchy created by the amounts of time and money people have to invest. Additionally, even if you have $500 to spend on a deck, you will only have that one deck, and must choose exactly what you're going to buy and play even more carefully. If there was a system where you can play with any cards at any time regardless of rarity or cost, that means you have every possible deck all the time.
I find that the official MTG Online is very well-done in this regard. It costs $10 for lifetime access to MTGO, which actually includes over $10 in digital goods, such as a starter deck and several dollars for buying new cards. Trading/buying/selling is streamlined and can be done incredibly quickly (there's even
sites specifically setup for this). Digital cards are, in general, somewhat cheaper than their physical counterparts (most likely due to the increased availability from the significantly improved ease of trading), but they still have comparable costs, so people have to pick which cards they're going to own and which ones they aren't.
When you combine all this with another massive improvement, which is how insanely easy it is to organize cards and create/store/switch decks on the fly (especially decks which share the same cards), the Magic experience is not only intact, but greatly enhanced.
As far as physical Magic goes, there is still rarity/cost affecting people with $400-500 decks from creating their ultimate deck. There will always be cards that most people can't afford or otherwise acquire, cards which would objectively improve their deck in some way. There's a deck I run on MTGO which I tried to make in real life, since it's my main deck online. I got the first 56 cards added together, it would have cost about $400. I figured "That's alright to be able to play my favorite deck in real life". Until I got to the last card, which I needed 4 copies of, and that card would have cost $350 per copy.
Suddenly my $400 deck would cost $1800, which needless to say was not within my acceptable Magic budget. The deck can't function efficiently without this artifact, since it has an extremely unique and ridiculously powerful effect which can't otherwise be replicated. Even really worn out copies I looked up cost $250 each, because it's a critical component of some other high-end deck that sees a lot of tournament play (the card was
Candelabra of Tawnos, by the way). I doubt the price has gone down since then, since the card is on the Reserved List (an official list of cards which are guaranteed to never be reprinted, in order to protect their value).
They did make a green creature variant of it at some point, also with the word "Candelabra" in its name to pay homage to the original. The critical flaws with using that should be obvious though; it wouldn't work because of summoning sickness, not to mention the need for green mana, the increased mana cost, and the million ways to kill/control/counter creatures which everyone puts into their decks.
Perhaps someday I'll manage to justify a two thousand dollar deck to myself, or the price of the card drops because they ban some of the other cards in that popular high-end tournament deck. Until then, I'll be playing MTGO almost exclusively, and using some less powerful physical decks whenever I do take my physical cards out