Before I say anything, let me make it clear that all of this is relative - its all about YOUR TARGET AUDIENCE. The answer can be on opposite ends of the spectrum if majority of your target audience is disabled people in Africa and my target audience is gamers in South Korea.
First, look at the ratio of JS enabled vs JS disabled in your target audience. For an average website, it is 100:1.
Second, consider bandwidth. jQuery minified and gzipped is 24K. But do all browsers work properly with gzipped contents? Choose the right UI framework or choose whether to use one at all, depending on your target audience's bandwidth. If your target audience is young people with heavy-usage broadband plans, they won't complain if the framework is megabytes in size. But when your website targets remote villages in some country for a relief effort or educational program or something then avoid such frameworks - they can barely get access to the Internet.
Third, for accessibility, two things are important:
- Anyone should be able to see/hear/know the contents in your website.
- Anyone should be able to perform all important functions in your website.
Once you take care of these using the minimum denominator technologies for YOUR target audience, you can always use javascript to pretty up things and enhance existing basic functions (auto complete, AJAX submit, etc...)
To sum it up, gracefully degrade.
Accessibility aside, I don't agree that we should gracefully degrade in the case where someone has JS disabled!
For desktops with browsers, saying that When people don't have javascript enabled, your website should degrade gracefully is like saying Your game engine should gracefully degrade to DirectX 6 because some people use Windows 95.. Doesn't make sense anymore. Note the word anymore. It used to make sense when JavaScript was only there on 50% of browsers and it was an emerging technology.
Anyone have any good reason why my 3D game should be able to degrade gracefully and use DirectX 6? Its moot. What DOES make sense is, my game uses DirectX 11 on Windows 7 but degrades gracefully and uses DX10 in Vista or even DX9 in XP.
Come on.. look at some stats. JS enabled to Disable ratio is like 100:1
Again the whole thing changes if 80% of your audience uses some upcoming web browser in a mobile device with shaky JS implementation to see your website.
If majority of your target audience/device has JS enabled, use it well. If they don't have, then don't. You just have to give them what they can use and see.
There will always be a minority, but if there is a pre-requisite to see a website and it is fairly widespread, they should have it installed/enabled or else its too bad for them. You certainly don't want paranoids in your target audience.
End of the day, only you will have the information that will help you decide how much you should use JavaScript. It is always dictated by your target audience and their devices.