It's not entirely true that a system like the G3 iMac can't do the internet, because while it can't do the modern internet, it can connect to resources out there, and there are software tools that work to some degree. I've even (very slowly) gone on macintoshgarden and retrieved software on a 68040 using Netscape.
But as has been said before, in working condition, any old system can still do exactly what it ever could with era-appropriate software, so for example, I can still design, typeset and layout a magazine on my Classic II, model business finances on a DOS box, or perform stock and inventory control and management on a PDQ. What's often really great about these systems is actually that they can't do the internet and thus distract from their core uses.
Also, that thanks to places like the garden, almost all the software that used to cost a fortune is now available just to download, so most of us have far greater breadth of uses we could put an old system to now than we could have realistically afforded then.
A G3 iMac is a capable and quite powerful system. It can be competently used for editing home movies with great production values, sophisticated photo/image editing, layout and pre-press work, is an excellent platform for even professional level writing, can be used for quite a few games even.... not to mention serious business use.
How much to spend on it depends on what you want. If just a shelf queen to admire, then you don't need to spend anything, otherwise it really isn't all that expensive to upgrade RAM and switch to a solid state hard drive, both of which will also help improve performance.