1. It costs about 3 times as much per GH/s for sha 256 or MH/s for scrypt as it does to buy a physical machine to do the work. This effectively puts your break even (NOT RETURN ON INVESTMENT!) around 200 days or more for these cloud contracts.
2. Your breakeven point is around 200 days and not return on investment because you do not have any underlying value with the contract (unless it is a gawmining hashlet that you can resell). With a machine your return on investment is helped somewhat by owning the machine at the end of the mining period.
Not correct. There are cloud mining services that offer GH/s for decent rates with fast ROI periods, like
Hashie.co - starting from $4.51 per 10 GH

-Sahra
hashie.co is too new, high risk..