It depends who you think your clients are and to what standards of work you want to produce. I have an illustrator friend who sells a LOT of his work as prints, cards, posters, etc... He does very well. He reproduces his own paintings. He has gotten good at it, and he understands how to print and does that himself. I have 5 of his paintings in my studio in fact and am always amazed by how good his results are. He probably doesn't have $3000 worth of equipment. Then again, he knows enough to tweak the colors to his standards.
The higher the tolerances and standards, and the pickier the clients, more valuable the work or reproductions, the more precise the setup needs to be in all respects. Color control, light color temperature control, illumination, lens field flatness, sharpness, etc... There are a lot of factors that add up. I do small time art repro for some local clients. Generally for their websites. I have gotten results that were excellent for what they needed using a multi-shot capture for better color reproduction with no moire and using a couple strobes set up carefully. Would I take a museum client with this setup...NOPE. Can my client sell card sets and 11x14s.... yup all day long.
Can you make a setup for $500... that's tough...your options are limited and quality control / consistency may be lacking. $1500+ for lights sounds more realistic, especially if you are looking to go used...and that is a starting point in my opinion. That is me thinking of strobes...in reality fixed lighting would be much better...but $500 is tough. Again, it really depends on what your expectations are and what your potential clients will demand. It also depends how large the original work is too. A 60" original canvas as a bit different to deal with than an 8x10 in terms of space needed and the lighting coverage needed for evenness.