Subdomain seems to be the defacto standard but a subfolder is much better for SEO
That's what I'm thinking so I'm trying to find a reason why everyone is hosting it on a subdomain. One reason may be that if you're hosting your blog separately on like for example WPEngine you need to have it on a subdomain or else you will not benefit from things like scaling (since it still needs to go through your server if it's a subfolder).
I've read a couple of different posts / comments from Matt Cutts that state subdomain vs subdirectory makes no difference for seo.
Do you have a quick explanation or link as to why a subdirectory is better?
I'm just thinking that if you're small Google won't recognize that it's actually part of the same page and treat it as two.