That requires extra hardware in your network though, right?

It requires a Hue bridge, but all the official Hue apps need that too (unless you're using the new Bluetooth support, which very few people are). You shouldn't need any other hardware though.

The advantage of their hosted services is that they can get through NATs without any additional hardware or software.

Locally, it doesn't really matter, since everything just goes over the local network. You're definitely correct for remote access though, but I hardly ever need to control my lights remotely.