Hey Adam,
Yes, you can host LimeLM on your own servers, but it's more expensive than our hosted plans (or wyUpdate, for that matter). The version of LimeLM you can run on your own servers is about equivalent to the Max plan of LimeLM (both in features and price).
Running high-speed, high-availability, activation servers is a lot of work. And there are a lot of moving parts. It's not as simple as plopping a Wordpress installation on a cheap PHP host. We only recommend hosting LimeLM on your own servers if you have at least one dedicated server admin.
The reason you can find alternatives to LimeLM at "bargain basement" prices, is because, well, these cheap competitors are crummy. We cover a few of the things our competitors mess up right here.
Does that make sense?