The prices look steep but you really should not compare to the cost of acquiring the physical hardware, because contrary to buying your own hardware, you can instantly re-sell your KHS (maybe with a benefit... but more likely with a slight loss considering the difficulty increase, which you need to offset with your mining profit). So you should see it as a rental deposit instead of a purchase.
Today for instance, due to the high volume of KHS put on at fixed price by the service, the prices are flat at 0.0014444 BTC/KHS. If you buy now you're practically assured to be able to resell at 0.0014443 until the remaining initial 90+ MHS are gone.
The other big difference with home-operated hardware is of course the scalability... I have over 20MHS with them right now, I sure wouldn't be able to do that at home!
Overall I've been very happy with them so far, cruising at ~0.5% gains per day on my initial investment.
My referral link in case you'd like to try it out:
http://scrypt.cc?ref=baaaY