Ethan! I feel like Misquoting Mark Twain ("Rumours of my death are exaggerated") I have used a whole bunch of Moodle 2.5 installs, and things have been fine. There are always a few little collywobbles possible in an upgrade (server variants, people using plugins that kill part of a site, themes that break etc).
But I have not seen anything to support your 'glitches' assertion Ethan.
Why upgrade? Drag and drop improvements. Breadcrumbs fix. Enhanced updating. Badges. etc.
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Nellie's post does in my mind raise a few issues. MP comments aside (Stuart has commented on that).
"Small players" like the situation who want to do it themselves can get into deep water. For my non-income making Moodles, I've tried running a simple Moodle on Bluehost, and every now and then got into difficulty and needed what I consider gifted/experienced amateur and professional help. It was often been a nuance in thing A needing Thing B tweaked to work, and often this is in the plugins/addons area, server setup, permissions etc. I did an upgrade and killed things several times. I took to doing upgrades several times as practice since if you do it once in a blue moon, you forget. I now keep detailed records of what I do since I forget.
Plugins are the problems I still have. If you don't bother with a carefully selected plugins you have a less than useful Moodle install. In the end for my small sites I've gone with a halfway house solution. I do pay for upgrades. I sell teaching to pay for these. I decided even with my best efforts I'd still never be adequate in the long term as a Moodle system admin.
Another option was to get help from a student who was really good. Time moved on and person X gets a real job and problem re-emerges.
I tried an "uber Moodle" with a number of small players there in the mix sharing one server. Problems with branding needs, security of students, and then one person needs one plugin we really couldn't sort. Also problems with Administrators. Moodle could be tweaked to make this more of an option.
I've tried to work with several New Zealand groups to get coalitions to plan a nice Moodle install and replicate it (School sector, polytech sector, non-profit). ie all the testing phase between upgrades is only done once. My latest playground has had several odd projects in it, and then they all bar two moved on to their own Moodle.
The Moodle in Schools project has had promise http://www.moodleinschools.org.nz/ but for a range of reasons has stalled. The big thing this did was help with authentication. CLAMP is another, but is only open to a small specific group. http://www.clamp-it.org/
The best option has been a few of the regional cross-school initiatives where system level admin has been with a person who is very experienced but actually has a day job as well. So when there is work or an upgrade is is done professionally and well. And in between times no-one is worried how they will make a living. This is the low marginal cost option. Moodle is hung off other activities.
I've visited four institutions in NZ where a local guy runs a network and does the Moodle on the side. In these cases, plugin requests, changes are very quick, and it's worked out well. The staff do not know how lucky they are.
I'm sad the Moodle network/hub development has slowed a little, one multisite install would be good. I think the upgrade paths and becoming smoother. We have yet to see how the user-download addons will impact. Plugins are still a challenge. The real future is with using GIT for quick and speedy ugrades.
There are many gifted amateurs who post on Moodle. One at random: https://moodle.org/mod/forum/discuss.php?d=229837#p998007
If I had to make a decision without an ideal scenario, where I really wanted to "do it myself" I'd do what these guys do. It will be a challenging haul. it will involve reading docs, getting your head around jargon, and being very accurate. Rough enough is not good enough when you are typing -gt *erg /f/h/k -jk. And I'd try to find a person to help when I get stuck.
Much longer a post than expected. I'm sitting in a coffee bar in Clapham Common run by guys who learned to make coffee in New Zealand, and it's been the only place I have seen here in London that had a Long Black on he list. Joy.
-Derek