The main advantage to using a CDN is that a single copy can be cached across multiple websites, meaning that the first time someone visits your site, there's a good chance your version of jQuery already sits on their computer. Plus, the Google CDN will often serve content faster than your own site. And, since jQuery is now so "integral" to websites, it almost seems silly to have to maintain a copy of it yourself.
But the main downside to using a CDN is that, CDN's have gone down before, and that means your site will stop working. Obviously, it doesn't happen often, but it happened once to a widely used site of a friend of mine, and he swore, never again will he reference jQuery on a CDN. I personally prefer to host myself too. (But not out of bandwidth savings, that just winds up being trivial.)
http://stackoverflow.com/questions/5257923/how-to-load-local...
I suspect that a comment made by user Zangrief is right on the money - enterprise users will increasingly take over maintenance of the 1.x branch out of necessity.
Can't you just host your own copy of JQuery? If your web app needs version x.y.whatever, is there some reason why you can't just host your own copy of the library on the same servers the provide the rest of your web content?
I understand the convenience of using some CDN's copy of JQuery, but I'm unsure why it's anything other than a convenience. Maybe it's about money: "It'll cost us an extra $X per month in bandwidth fees to host our own version of JQuery." Maybe it's about user experience: "By hosting JQuery on our own site we add 100ms to page load times."
To the people who seem most unhappy about the version bump, can you describe how hosting your own version of JQuery would complicate your lives? Just so there is no ambiguity, I'm asking from a point of ignorance, not snark. I would genuinely like to read the answers.