I've worked both in-house (at Business.com) and I built and ran large agencies as well (eVisibility, Geary Interactive, Organic Media Group).
IMHO, outsourcing SEO is the best way to go no matter what. And I'll give you 3 good reasons why.

1. In-house SEO teams (and individuals) get myopia. They stare at and analyze the same site every-single-day. So its tough for them to "notice" things. A third party perspective really comes in handy, and that's where an agency fits in.

2. In my 11+years of experience, there has never been an in-house team that is as creative and cutting edge as an agency. In-house teams don't usually innovate when it comes to SEO and link building in particular. Agencies work across many niches, constantly. They develop new techniques. In-house teams almost never do.

3. Management. Managing and paying salary and benefits to an in-house team or person is expensive and takes time. Most companies aren't big enough to really afford to hire an in-house person or staff properly. They are better at other things. Which is why you hire a professional agency and then you get out of their way and let them do their thing, with accountability and reporting of course. And its easier to cut bait with an agency than it is to fire an employee, for various HR reasons.

Can you get results with an in-house team, of course. But your probability for success goes up alot when you allow an agency to handle things.

And if you don't have a ton of budget for SEO, an agency is actually much more affordable too. I guess this is bonus point #4. You can't hire anyone decent at SEO for less than $4k-$5k per month, plus benefits and time spent managing them. You can get a VERY good SEO campaign with an agency or consultant for $3k-$4k per month or less.