I checked out your site, and not sure if I agree with this. With your pricing a consumer using your product would only have to use it for 5 months before the self-hosted option becomes economically attractive.
To buy Photoshop CS6, alone, would cost $700. Adobe CC prices it at $9.99/mo - meaning you could use their CC option for 6 years before breaking even. In those 6 years, with CC you would get upgrades as well - OTOH even if you were to upgrade every 3 years, you wouldn't break even.
IIRC, Master Collection was $3,000, and is now $600/yr. Meaning if you bought Master Collection you would break even with CC if you only upgraded 5 times a year.
To make your analogy more apt, you should price your non-cloud offering at $600, and then compare how many people prefer it to cloud.
Personally, I think their decision to end their standalone offering had more to do with simplifying DRM than anything.