Re: apartments, that's simply not true. A 1-br apartments in Bangkok is not $1300 - 2000 per month. You might be paying foreigner/expat prices and getting heavily scammed. I found a 1-br apartment 5 mins away from the BTS (public transport) for $300-$500. That's with a pool. And not uncommon. Same with the food, you might have been paying foreigner prices there too. I'd pay $7 for a table full of sushi for one person. And that would be a very very luxurious place. I' always check the prices before entering a restaurant, like any place in the world really. Many foreigners simply go to the non-local places in tourist traps and end up paying too much. Bangkok doesn't help as it's already expensive relative to the rest of the country. Just like any big metropolitan city really. That's why I wrote, stay out of Bangkok. Yet even then if you want, you can live cheaply in Bangkok too if you're smart about it. Thai do it on $500/m in Bangkok.
Re: western food, I think it's obvious that if you're looking for Western products, you're going to pay more than in the West. You're not in the West after all! It's a bit spoiled to expect Western food to be the same price as in your home country. However, if you can assimilate, live, eat and drink like a local, you can live very cheap.
That's why I stayed in Chiang Mai. It has low rent, low cost of living, abundant nature and countless of coffee places to work from.
Re: sex workers, I don't know if you're in my age group (I am 27) so YMMV, but if you go clubbing in Bangkok or Chiang Mai, you will run into prostitutes. Everywhere.