Not that dramatic. Self hosted works out to more than $4/mo unless you cut ridiculous corners like having no backup or no SmartHost. But you can self host under $12/u/mo normally.
IOPS are the biggest concern really. But without anything like a database which really needs them, RAID 6 might be more than enough. Exchange wouldn't be a big concern as it is not IOPS heavy. RAID 10 is far better tuned for heavy writes, but if reads are the vast majority, RAID 6 will keep right up.