What there was before Arduino?
There might be a bit of confusion as to what Arduino is: Arduino is not just the hardware platform, but also a set of software that allows the same code to run on most/all of Arduino-compatible boards.  However, since your question seems to be about hardware, I'll stick to that.

Arduino was first developed in 2005. However, other easer-than-bare-chip systems around before then. Two examples:


The Parallax Basic Stamp was around in 1990s
The PICAXE, the PIC "alternative" to Arduino seems to be traceable to around 2000.


So the first answer is "other Arduino-like systems were around before Arduino". The PICAXE, for instance is programmed over the serial port, in a manner similar to Arduino (which is programmed over the USB, usually).



Before that there were bare chips like AVRs and PICs, and hobbysts had to build the supporting circuitry (like LEDs, crystals, etc) themselves, circuitry that is built into the Arduino.

The Flash-based chips can be programmed in a manner similar to programming the Arduino without the bootloader: over the serial/USB connection.  This requires dedicated programming hardware, which you can build at home.

Prior to Flash-based microcontrollers there existed other types of EEPROM and EPROM programmable chips. The programmers for this type of digital logic were bulkier and generally not something hobbyists built for themselves.