There's a psychological cost to having to stare at old and crappy gear all day. The morale boost alone might justify buying LCDs, in the same way it justifies Facebook giving free fancy bottled drinks to its employees.
Also, a lot of companies are sitting on big cash reserves now. For example Apple has about $43 billion in cash right now; Microsoft has about $40 billion. In that case, an extra dollar of capital expenditure will not come directly out of investment in the core business.
Maybe your company is small enough that capital expenditure is a real worry. Even in that case, though, the monitors are probably a good deal. Dropping $100 on a monitor is cheap compared to most of the other perks a company can offer to developers. For example, giving someone a half-day (assuming they're making 80k/year) is $164. I'm sure you can do the math for other stuff like catered lunches, free daycare, bigger offices, and so forth. The monitor is awfully cheap and awfully effective.