The plateau tops off when you get to the 40-50fps range and never dip below 40 in the heaviest of use.
I understand your point but it doesn't have the impact it used to when mechanics actually were centered around FPS and timing.
Jetpack fuel usage in Natural Selection, for example, used to be dependent upon your FPS, so with my supercomputer at the time rocking 100FPS I had nearly infinite fuel over that of my counterparts having only 40-50FPS.
This of course was fixed over the years, but games for the most part overall have learned their lesson there.
As far as peripherals go?
I paid top dollar for my mouse and it's still kicking ass years later. (Razer Copperhead)
I paid $9 for my keyboard and it's hands down the best keyboard I've ever used. (I've shelled out $75+ for keyboards in the past and was left feeling underwhelmed. Though the programmable macro storage was almost worth it alone...)
I spent $50 on my headphone/mic combo, with active noise cancellation.
Major step up if you're going into competitive play is a headset first, honestly. Hearing where people are that you can't see is key.
To address the ninja post:
I already said my response to that. It's level in the sense that
everyone is playing with a hand behind their back. The game is "designed" around the idea of everyone being handicapped right off the bat by the shitty peripheral. That's just a terrible way to look at game design, IMO. And you don't think people are cheating on the 360 either?
You are sadly mistaken, hard.