I've been involved in several acquisitions where we've taken over places that outsourced their email. It's not a bad arrangement for a small shop, and works if you can live with being dependent on someone else for that. At some point it's going to start costing more than bringing it in house.
Agreed. *That* break point, in my experience, shows up at around 150 users, depending, of course, on volume, usage patterns, etc., etc.