It seems (from prev. post as well) like you were trying to stay on the cutting edge functionality wise. OTOH I was arguing for running stable and maintained Linux distribution.
I'd certainly agree that the initial investment is pretty big—not only it takes some time, but you need non-trivial specific knowledge about Linux administration—and for that reason alone I'd advocate using maintained hosting. My only beef with your comment was that, in theory (and in my experience), a properly configured VPS running stable software shouldn't require nowhere near the level of maintenance you seem to be suggesting.
A one-man operation doing sysadmin, development, everything? I'd be looking for hosted solutions too for my clients - it makes my life easier.
But as a company, with a development and operations staff? I'd be wary.
Famous last words...
I'm not saying it can't be done, I'm just saying that my experience has been different. Another example, I used to have my own installation for our websites and bug tracking and time sheet management software, on a locally-hosted machine with apache and mysql and a bunch of other software. The number of hours I've spend migrating data between versions, tweaking mod_rewrite rules, setting up backups for various databases and other data, making usage statistics etc. - I don't even want to think about it.
Recently I moved to a shared hosting server. The yearly cost of that is covered with one hours of my hourly rate (and I'm not even expensive). I can set up 50 or so different applications with a few clicks in a web UI, and upgrades are handled by it, too. Backups are taken care of, I have a web ui for dns, ssl, everything. It was like a breath of fresh air.
To each his own and each situation is different, of course. But there's something to be said for division of labor.