LFS isn't difficult from a logistics perspective; once ya have it running, it runs great, no bloat, linux exactly how you like it. WHen you need to maintain it (updating software) LFS becomes all too much work for one person. I can imagine LFS being really freaking handy if you ran a Linux computer lab of 100+ identical computers and could just change one and clone it to all the others, where rolling your own distro would be ideal performance-wise. Of course, nobody runs a 100+ computer lab alone, so that's a factor too ;)

Installing from source is *precisely* what made me love Gentoo. The fact that I can optimize everything to the exact processor type and optimize things based on the fact that I'd gladly waste memory to get more speed (I can pop another DIMM in there for cheap, processor...well, not so easy). Updating it is time consuming, especially if you put it off and don't update in a few months, and then have several hundred ebuilds to update, and need to fix the portage tree up a bit to fix some version rot. But generally, I can update the boxen at night when I sleep, have the output piped to a file, and read that file at work for anything interesting. Can't spend my *whole* day at work reading /. after all :D Problems happen, but that's the rocks with any linux distro.

The learning curve is hard, especially on the install, but if you read the gentoo forums from time to time, ya tend to see very few total idiot questions, like "how do I install internet explorer". The distro kinda has a builtin idiot-filter by having such an intimidating install process. Being a seasoned linux person, I love being able to choose to use the Intel compiler instead of GCC from the very start on my laptop. (Side note, stuff compiled with GCC 4 is *much* zippier than stuff compiled with Intel's compiler on my P4 HT 3.2GHz laptop).