The LEA thing I would suggest is to be avoided like the plague as once you've moved over, it will be hard to move back. You are surrendering all control to an outside agency and as teachers inevitably become more skilled and demand better tools, you will be a bit stuck.
As for the shortcomings you list, I agree with all of them! Many are fixable ro fixed though:
- SSO is fixed as of last week, provided you use MSIE in school, use LDAP and have the MSIE fast path setting turned on. Upgrade to the latest CVS code to try it.
- Web forms are a pain, agreed, but this is being discussed right now and hopefully will change in Moodle 2.0 which will be along within a year
- HTML area has already been replaced with TinyMCE in the Moodle 2.0 code and is Sooo much better! Download the 2.0 dev code snapshot to try it out.
- Home logins - do you have a self signed SSL certificate? This is causing headaches for us, but it's not really Moodle, more a case of over-zealous anti-virus at home.
- Performance - this should not be a problem with a properly set up system. I can help you fix it if you use Windows, or else check the performace docs or the hradware and performance forum (if you haven't already). How do you host Moodle?