Answering from a customer point of view- sensitive, regulated or simply old fashioned industries will want to avoid using SaaS for sensitive material like credentials. I think that the main challenge I faced, again as a customer, is support and maintenance- your software will run on an endless variety of platforms using different versions of it by people with varying competence levels and you'll need to support all of them

Not really. Just ship a Docker image and anything else can fall outside of standard support.