Hi there million, not sure if I have an answer for you or not, but wanted to share my experience.
I also love web software development. A couple of years ago I decided to build an online flashcards site targeted to young kids. Here it is:
Moone Leaf Flashcards: Picture Index
I had all sorts of ideas on how I would eventually make money from this site by selling subscriptions or premium content, but building the prototype didn't get me to the level I needed to really do this. Basically, I felt that the content presentation was all right, but the user interface for adding new content was really sucky, preventing me from building a community around my site and leveraging a lot of Web 2.0 technology (all the content on the site right now was created by me). So I started working through a programming book on Zend Framework and building the next version of my product.
Meanwhile, I realized that I could spend a lot more time programming and honing my craft if I did it professionally. (I'm a stay-at-home mom and could spend more hours programming if I had some extra money to cover daycare.) So I applied for a few PHP programming jobs, and got a perfect fit -- a 10-15 hours/week mostly telecommute job working almost exclusively on Zend Framework. I LOVE MY JOB. It is challenging and I am learning so many new and exciting things -- things I hope to eventually apply to my own website. And today they offered to raise my hours to 20-25/week, which is great.
(If they hadn't, I might have finally had some time to get back to my own site, which would have also been great.)
I think with Web 2.0 and community sites, there are opportunities for things like ad-based revenue. Maybe there's even a grant application in there somewhere for an educational product like mine. In my case, working on my project led me to a job with great synergy for the skills I am interested in acquiring.
I hope you'll post back with more of your experience in web development and what areas/products you are interested in -- I would love to hear more of your story!