NiceHash seems like a cool idea. It must have launched right around the time I stopped messing around with Bitcoin. It may have kept me around longer if I knew about it at the time.

I can see how the price to rent would rise when there are alt coins people want to throw lots of hash power at for short periods of time, but when it comes to mining Bitcoin itself, is the idea people with hardware can get a PPS payment with no variance (albeit lower than mining normally) and people who rent can pay the PPS and then mine bitcoin directly to arbitrage the difference in expected return by absorbing all of the variance themselves?

Or do people not generally rent hash power to mine Bitcoin, and instead it's mostly about the alt coins?

Edit: I guess that's not the thing at all. Looking at the price history graphs, esp. on scrypt, people consistently pay more than the miners would make mining bitcoin/litecoin themselves. Are buyers of hash power predominately mining alt coins?