Hi,

Well I agree with your points on hosted solution, let's assume a business owner buys a in-house hosting e-commerce solution and in order to do so he has to plan for the following.

a. Hardware
1. Server - $$$$
2. Internet connection - atleast DSL/Cable with dedicated IP address - $$$
3. Network Management - $$$

b. Softwares
1. OS - $$$
2. Firewall - $$$
3. Backup plans - $$
4. Maintenance against virus, spam, hackers etc - $$$
5. Credit Card softwares such as Payflow Pro/Authroize.net etc - $$$

Oops I forgot to add the most important thing "Time" the business owner got to find some valuable time to setup the hardware and software mentioned above (remember he is just 2 employee size company OR he has to spend $$$$ for hiring consultants to setup the above)

Now should the business owner figure out all of this OR should he focus on his core values, i,e business ?

So there is Pros and Cons in both ways, identify what you have and what you can afford and then move forward. I have worked on both kind of solutions, of course "one size doesn't fit all" and hosted solution may not fit all business owners neither hosting at your own location may not fit everyone ...