This isn't really true anymore. IO has bad latency, but modern SSD bandwidth is ~5-15GB/s. If your program is IO latency bound and processing less that 5GB/s you aren't IO bound, you aren't hiding your latency well enough.
That's nothing compared to modern memory bandwidth.
Not anymore, no. Your SSD, before any caching, does gigabytes per second of sequential reads. For any bytewise processing, except the most trivial of tasks, you’ll struggle to get above a few hundred megabytes per second with scalar (native) code. To actually keep up with a modern SSD, you’ll virtually always have to hand-write SIMD loops, minimize the number of syscalls with tools like io_uring, or possibly be smart about distributing tasks across cores without ruining the access pattern.
For instance, simdjson is famously fast but I don’t believe it can keep up with say a high-end PCIe Gen 4 SSD like a Samsung 990 PRO, let alone the latest-and-greatest (and, literally, hottest) Gen 5 stuff. And I know of no Unicode normalizer that would be able to do a gigabyte per second on general inputs (not ASCII, not Latin-1) simply because the latency for dependent lookup table accesses is absolute murder.
What your comment demonstrates is that it is possible in some cases for I/O to be fast enough to not be a performance bottleneck for certain kinds of programs. But not that I/O is not slow.
And I think you’re being unfair labelling my couple of examples “some arbitrary algorithm[s]”: my choice was indeed arbitrary, but it’s also immaterial. The general setup would be that you’re processing elements in a loop and that your iterations are serialized (as they usually more or less are before you get around to optimization). A loop body of even three lines of C is likely to have a latency of 5–10 cycles or so, and you’re running on a core clocked somewhere from 5 GHz (desktop) to half that (server). So the best you should expect is ~500 MB/s if your elements are bytes, ~2 GB/s if they’re 32-bit integers, etc. For very simple tasks (that are also somehow not susceptible to vectorization), it is possible to not lose this order of magnitude and get down to almost 1 cycle/element in scalar code, but that requires heroic effort[1].
Such programs are not inherently unoptimized. One common optimization is to use an event loop, allowing just a few threads to handle thousands of concurrent operations. Because while a thread is waiting for I/O in one request or unit of work, in the meantime it moves on to work on processing another request/unit. Another common optimization is batching/grouping of I/O calls.