"Given [a well-designed/balanced system], the processing power of the application cluster is arguably the most important factor."

That doesn't follow. You can have a well-designed system where the PHP code only contributes 10% latency and resource usage, in which case the PHP code is clearly not the most important factor.

"This might just indicate you better have 25 app servers vs 100 databases and spend the rest of money proportionally on both clusters."

Exactly. What matters is proportion of latency or resource usage contributed by the PHP code, and that can vary a lot between well-designed systems. The property of being "balanced" doesn't automatically make your PHP application cluster "the most important factor".