Was the Y2K threat real, imagined, or invented?

In response to my post regarding false predictions not being properly punished, some blog readers took exception to my argument that the hysteria that surrounded Y2K was a false prophesy. Their argument is that all of the preparation leading up to Y2K averted what would have been a disaster.

That just doesn’t ring true to me. Was there not anyone, anywhere who either failed to properly prepare, or maybe happened to overlook some aspect of how Y2K might affect their systems? Did every small business and third world country catch every bug? Did anything go wrong as a result of Y2K? Did anyone ever test a system in advance of Y2K and find that had they not tested, something catastrophic would have happened?

Here is a good article from Larry Seltzer who knows much more than me about the subject and holds the same view.

My recollection is that programmers were getting paid far above standard wage rates due to the great demand for their services with Y2K. Could it be that there were strong incentives on their part to exaggerate the danger? Sounds logical.