What you want to use the LC PDS for is up to you; if you really want a IIe experience then sure, go for that. There are a few other cards worth considering too (TV out, second monitor, PAS 16 audio/MIDI).

However:

I guess my question is how slow is the internet going to be on the LCIII?

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Horrible.

Would a beige powermac be better suited for low end internet and games that have troubles on the 68k?

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Absolutely.

IMHO, don't bother with LC ethernet. Cut out the huge middleman in your sneakernet, and get a USB ZIP drive. 100MB at a time is plenty for an LCIII. Localtalk the LC to the beige for day-to-day transfers - heck, you could even run a text browser over the connection if you need to. Or get an ethernet-localtalk converter. Sure, slow, but then so's the LC, and the relevant files are small