Cost/Bandwidth is always an issue. We integrate out of the Atlanta area and do full hosting for systems of usually 8 or less cameras. We also don't do 2MP cameras at 15fps......we want the user to be able to see his/her video from a mobile device without waiting forever on a huge file. It's cost vs benefit. Outside of a truck ramming through your pool gate, getting above 5fps doesn't do them a lot of good identifying visitors. I also don't need to see the pimples on the face of a lobby visitor.
Those that have more cameras we do a managed server with same software, and then dual record some key cameras offsite at a low resolution as a backup. We've had more than a couple auto stores have a DVR stolen and that's why they've come out way.
The benefits we sell are: no data stored onsite for theft, we handle all the updates and maintenance, when new phones/browsers come out we'll support them (unlike most dvr installs that STILL don't work on firefox or safari). Many like that they can be hands off. I pay a lawn service to handle it, why not video surveillance?
But it is still a limited business but one that can be good for some. We probably host ~500 cameras and have managed servers on another 1000 so it's good recurring income for a 5 person company. Most of them are between $8 and $20 a month per camera.