Can internet gateways be plugged straight into a layer 2 switch?
Solution 1:
I read your entire question, and your last sentence Am I wrong in the assumption that a hardware router would solve our problem?
no one here can properly answer even with the data provided. OH, and for grins I'll say that you should first check and see what kind of duplex/speed settings the ISP setup on their fiber handoff...as you almost always want to match theirs with static duplex/speed settings.
However, I will answer your title, Can internet gateways be plugged straight into a layer 2 switch?
...ABSOLUTELY.
I'll even give you a case in point. I've seen numerous 100Mbps and above internet connections where the ISP will provide an ethernet hand off (usually a simple biscuit RJ45 jack)...probably just like what you got since you plugged directly in with a laptop, etc...or plugged directly into the cable modem, etc.
A lot of times, there can be a need for the demarcation point for the ISP to be in a different room than some of the networking gear like the firewall, etc. that the true IP/endpoint will be on. For instance, if the company has multiple buildings on campus and wants to have the ISP put the demarcation point for that link in a separate building from the primary datacenter. In this instance, you'd simply have it plug directly into a layer 2 switch that has VLAN capabilities and extend the VLAN from the primary datacenter where the firewall/edge gear is, all the way through the network via Layer 2 VLAN until it reaches the switch the ISP's handoff is plugged into.
There also are times a simple layer 2 switch is used to create a poor man's DMZ or to setup a simple way to do HA between 2 firewalls and the ISP handoff.
Bottom line...yes you can plug an internet gateway straight into a L2 switch, assuming you know what you are doing and wanting to accomplish by doing so.
Solution 2:
I think your issue may be with Duplex settings, some of the older switches just don't negotiate it right.. and your server may have the same issues. When the server is plugged in, have a look at eth0.. or whatever port you are connecting. 10 to 1 it's set to Half Duplex.
P.S. Most people plug routers right into Layer-2 switches. :)
Solution 3:
There are a lot of questions and possible problems here.
1) You can connect your Fiber into a layer 2 switch for sure. 2) Your dumb switch at the edge is ridiculous. What you probably have is a mismatched duplex setting and/or speed setting. Your home equipment needs to go. Then make sure the switch duplex mode and speed matches the other end. 3) If you don't have a router, then your ISP does the routing? Do you have multiple IP address to assign to each device? 4) You have a security issue here, no router, no firewall. So your servers are "straight on the Internet". Best way to get hacked.
So bottom line, your problem is not the lack of a layer 3 device as proven by the fact that you plug a laptop directly to the "fiber" (well not fiber since it's a copper cable) line and it works perfect. But then you throw in your dumb netgear home grade equipment and it drops speed, then that's your problem.
So:
1) Get a proper device - layer 3 or 2 - to connect your servers to the Internet feed. 2) Ideally, get a router and/or firewall - I would say minimally a firewall - to protect your devices.