Sounds like dielectric grease. I use that stuff in RJ45 connectors in harsh environments, it keeps the connector from corroding by keeping moisture out. It's especially important to use it in PoE applications, 24/48v causes things to corrode to hell real quick.
Yeah, switches were generally in the hundreds of dollars range when you could get a hub for like $50.
I remember back in high school computer repair class we were trying to build up a 10/100 ethernet network and needed three switches to span the length of the shop (it was a very long room.) The teacher kept buying hubs despite us telling him we needed switches. Connect more than two hubs together and the whole network goes down. We could have used one large hub or switch, but didn't have a box of Cat5e to make our own cables.