Absolutely, but in the meantime solar panels have improved enormously also. The third part of the equation is launch costs, which haven't really fallen at all.
Launch prices basically are energy costs, plus a markup, so they are never going to make this work unless you could make the whole thing extremely light...
O'Neill's plan was to bootstrap manufacturing in situ, starting with robotic mining of moon dust or rock. The ore would be sent to L5 by linear launchers and then smelted into simple metals to make reflective surfaces.