My 2cents on this:

#1. I don't think it matters much one way or another.

#2. I agree that that with a remotely deployed application, I can make changes to the stored procedure and it's done with out an application update. It's fast and easy.

#3. Our application is in over a 100 hospitals right now, and a guess is 80% of our queries come from calling sql stored procedures. But recently a couple of our sides (really 2 in one week) saying they were trying to run a report that just the day before came back in seconds and now it was taking 20 minutes. It turned out that logging into there system and running SP_UPDATESTATS took care of the issue. But prior to doing that, I ran the stored procedure from QA and it took 20 minutes, pulled the code out of stored procedure and ran the code in QA and back in 1 second. Recompiled the stored procedure and ran it....still slow. Googled the problem... came up with SP_UpdateStats. After running it, I exec the stored procedure again and bam...back to normal.

I don't think anything is black & white / right or wrong. I think it must come down to what works for each person and their product.