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Is there any benefit to buying powerful hardware for Dapp development? If hardware is not very important what would give the greatest (performance) benefit in improving development speed?

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You don't need powerful hardware if you are using command line tools. You can write the source code in a text editor, compile and deploy it in geth with the solidity compiler.

If you want to use IDEs (Microsoft Visual Studio for example), you would need enough computation power and memory to support the IDE.

If I had a fixed amount of cash to spend, I would prioritise dual monitors, a solid-state drive and 8Gb+ RAM before looking at high end CPUs as I have found this the most important factor in software development.

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No, it is not necessary to have powerful hardware to start DApp Development.

However like BokkyPooBah said, its good to have a better hardware to pursue the development in case its your primary focus.

Ethereum development environment can be set up any machine, in fact i am running a public full node in $5 server on DigitalOcean, with no issues so far.

You obviously will have to adjust some values to control the resource usage,

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