To me the strongest argument for keeping development in house is that programming Is a very powerful way to learn about a ___domain, so if your business involves an innovative or differentiated product it's probably valuable to have this learning accumulate within your team.

If your innovation is only in your business model or marketing then it may be better to use a mature, proven partner for development because building a great development team carries its own risks and can add to the schedule.

Getting it done cheap is rarely a good idea in either case because either way you will have to satisfy customers and do maintenance.