Ryan Moore at the UncannyOwl.com recently published an article titled "11 Reasons Hosting Your Own LMS Beats the Cloud". The article raises several important aspects that need to be considered when selecting an LMS. Many LMS purchasers focus on LMS features and don't consider these important areas. By factoring these items into your LMS selection. I generally recommend a cloud LMS because it is the most cost effective option. I would only recommend implementing a hosted LMS if you have a security, data residency, or other overriding concern that justifies the increased cost of a hosted LMS.
Read my take on his 11 reasons.