chris,
i see some of the points you are making, but you haven't mentioned that the on-stage amps 'may' sound better than two speaker arrays in a club setting (based on nice tube stages and different effects that can be done on the fly.) i just did my first, so i'm pretty new to onstage, but at this club i always have the house pa dialed in. however the on-stage, blows the house sound out of the water, simply because you are closer to the sound source (less crowd.) i'm suggesting that the house sound has a somewhat negative rating (in my book) with a room full of drunk people, even with hypers directly at stacks, dfc.
i find the best thing from my recording i just made, was the true separation of sounds from the stage. it may not be correct balance, but it was loud and sounds great (24/96), so i'm with shawn on this one. onstage can sound great, but the setting is everything. onstage, for a huge venue, not a good idea. for a small stage/act, easier to make the tape sound AWESOME.
all of this is for instrumental, acts, that don't pump a vocal mic.