In this age of Google and Tripadvisor, $3.5K per person excluding food and spending money is a HUGE amount if you spend sensibly (flying economy). We managed to take in Hanoi, Sapa + hill trek, Ha Long Bay (actually, Bai Tu Long Bay- just as beautiful, much quieter than Ha Long- with nary a tourist in sight for the whole trip), HCMC, the Mekong Delta, Phnom Penh, Siem Reap & Angkor Wat, Battambang, finishing up in Bangkok for under $4300 per person (there were two of us travelling) inclusive of ALL flights, accommodation, overland transport, entry fees AND food, spending money AND paid airline lounges. We stayed in hotels of the caliber of Sofitel Hanoi and Park Hyatt Saigon, alternating between luxury hotels, overnight trains, simple but amazing homestays. We researched local restaurants extensively prior to departure and had incredible meals in the best-rate restaurants in each city- some places would earn a chef's hat if it was in Sydney.
Budgeting is all about finding the best value and best quality for what you're after. One can be ripped off even staying in two-star hovels but find fantastic deals for five-star luxury. We managed to do a 28-day trip of western Europe (UK, France, Switzerland, Italy & Greece) for $7800 per person in 2010 inclusive of everything, again researching extensively and ending up with great accommodation deals and wonderful meals- Our hotel in Venice was 4 minutes walk from Piazza San Marco and was no more than $70 per person per night, while the one in the 1st arrondisement in Paris could win an interior decorating award.
But I highly recommend homestays are highly recommended for SE Asia- you can save some $ which can be put towards a stay in a better hotel, and have an unforgettable experience.
My advice? Choose your continent and your countries, map out a route, read Tripadvisor/Frommer's/Fodor's/Lonely Planet reviews for hotels in each city (cross referencing all if you have the time), use Google maps to pin point the location of each recommended hotel, make up a shortlist, then Google the best deals for them. Sign up to hotel loyalty schemes if they're free- I've gotten upgrades/complimentary gifts each time (despite only signing up at the time of booking). Repeat for restaurants and make a list to take with you so that you can book when you get there. It's a lot of work and it sounds obsessive, but you'll end up with a fail-safe, no-disasters and ripoff-free trip!