Workgroup: I/O thru file system, clients responsible for locking, concurrency, etc.
Client/Server: I/O thru DB's protocol (eg TDS), server responsible for locking, concurrency, etc.
--
As for what was lost, I spent way too long (10+ years) trying to figure that out, trying to fulfill the desire to recover the ADO (Access Data Objects) programming paradigm. I think I succeeded, more or less, and am currently reorienting my life to work on it full-time.
FileMaker may be an alternative, but I never understood why it hasn't caught on.
And I am not even sure if there are any product similar that is good on the Web.
Most multi-user apps were two tiered: client and database. The way they worked was by connecting directly to the database and/or a shared filesystem in the local network. All validation happened client-side.
Database credentials and fine-grained file/directory permissions were the only security measures. That and the NAT. ;)
There's still software in the market that uses this model, like some niche ERPs from the 90s and software catered to small/mid businesses.
It baffles me that the CCNA materials is still based around these use cases.
It wouldn't have been too bad, except the ODBC interface inadvertently led to abandoning schema-aware programming models like VB's ADO, Paradox, FoxPro, etc.
At the same time, object oriented became fashionable.
So we ended up with ORMs, ActiveRecord, and various offshoots.
Mostly because no one remembers life before client/server.