This is a cloud service, so a developer would have to be comfortable relying on external services, including data storage. As this is becoming a trend among developers, there is more comfort with having your infrastructure external.
Another fear I have is that you could change your terms or your prices at any time and I'd be stuck, as all of my user data would be on your machines (unless of course I could export them). Personally, I'd rather have full control over my database, though I'm sure a few others would be OK with this setup.
mdolon - I completely understand where you are coming from - having been in that situation myself many times. Being a developer, I am planning to have this completely open - download your data at any time, either via REST APIs or a full export.