Unfortunately, it appears as if our tale is the industry standard. I was at the ITC conference in Long Beach a few weeks ago and had the same discussion with several people. It seems as if we all do our best to escape the clutches of Blackbeard and just about the time we think we're free from their grasp, they suck us in again.
The good news about Instructure is that they seem to be digging in their heels and preparing for the long fight. Here's a most excellent blog post from Josh Coates on the topic. Gotta hand it to him, the fella's got a pair of brass cojones. But, Blackbeard has the cash and he who has the cash makes the rules, and time will tell us whether or not those brass cojones are real or if it's all bluster.
Sorry to hear about your struggles with the IT folks at your school. Fortunately for us, our IT folks are actually a very solid team who are ready to work with us regardless of which direction we choose. But our institution lacks the funds and manpower required to support internal hosting of the LMS, so we're stuck with using an external host.
We've been playing around internally with the new Pearson OpenClass platform, but are VERY hesitant to jump into bed with any publisher to such an extent. (The vile textbook publishers are another topic for another day)...
In the end, my fear is that we're going to end up with an interface and system that makes it more difficult for students to succeed. Students can't master the course content when they're constantly struggling with the LMS and/or publisher resources. As Blackborg continues to assimilate the competition, they stifle the growth and advancement of the LMS as a whole, and instead of simplifying things, they get more complicated which in turn hinders student success.