The X Window System didn't immediately have X terminals

The tricky thing about justifying an X terminal is that it requires a nice graphics system and probably a nice cpu to drive that graphics system as well, so really the only thing you don't need is storage. basically it is hard to save money because you are buying most of a nice computer anyway.

The biggest saving by far was that they needed fewer people to administer them.

At the time, it was typical to assume that each sysadmin could look after a dozen machines on average, maybe twenty at best. So if each of those dozen machines could support 10-20 users on X terminals, then you'd only need a single sysadmin for every 250 users. That was a big cost saving vs having a dedicated workstation on every desk.

But in the end, DOS/Windows PCs had even bigger cost savings because most users could be expected to do minor admin tasks themselves supported by cheap IT helpdesk staff rather than expensive Unix greybeards.

For a brief-ish period, Sun would happily sell you diskless Sun workstations that did everything an XTerminal did plus offered local computing.

Two of the universities in town had labs of them for students, all booted remotely, all the storage on a bigger Sun down in the server room, ugly coaxial ethernet everywhere and those funky blue/silver mouse pads and optical mice.

My boss at the time was pretty dark on Sun, because they sold her a lab full of Sun 3 workstations without telling her the Sparcstations would be released shortly afterwards.