3. With every increase in difficulty your investment pays less and less. Sometimes as much as 20% less as is the case with bitcoin. This difficulty is reset often and at the present time only goes up. Altcoin is a little better with the difficulty moving sideways for awhile until the next wave of machines hits the market.
This is probably the biggest concern, but most cloud mining companies have plans to combat this in various ways. LTCGear will "multiply" your shares to combat difficulty. GAW/Zen has just recently increased their SHA-256 hashlets output by 50% (10GH/s to 15GH/s). So the threat of difficulty eating into ROI is there, but some of the cloud mining companies are doing right by their customers. Lots of cloud hashers reinvest to increase their position and to offset perceived difficulty changes.
There are strategies to combat difficulty, but no one really knows if they will pan out. There are plenty of stories on both sides of the clould mining game, and I don't think we've had enough time to say for certain whether it's good or bad overall.