DustinDortch
"If you're looking to remove the last Exchange Server and you're still maintaining Hybrid Identity, you're not the "average" customer, in that situation."
I don't know if thats true. At least from what i've seen, the majority of the customers want's to either get proper access to Teams/SharePoint, or they want to get rid of their Exchange Server. Most of them are very disappointed when all mailboxes are migrated and i say: "Yes we can remove the Exchange server but...". Most of them use 3rd party Software which needs a local AD. Yes, in a perfect world the software would be able to use the Azure AD but thats not always possible. I've migrated around 40 customers to Exchange Online, 2 of them are Azure only, 2 of them have the Exchange Management Tools, around 6 or 7 had no Exchange before, but most of them still have one even if they don't want it.
"If you want an ECP and still also need SMTP relay, then not eliminating your last Exchange Server is really the way to go."
Exchange is way too huge for these two things. There are 3rd party GUI solutions for the Exchange Management Tools, even the 3rd party integration into the AD directly (Easy265Manager). You could even adjust it with ADSI Edit only, but no we should get a full server for this task? I think Microsoft could write a tool for that in 2 weeks which replaces the local ECP standalone. Same thing for Mail relay, the GraphAPI is so good, creating an SMTP Server which accepts unauthenticated SMTP locally from whitelisted IPs and pushing the mails through the GraphAPI should be possible for one of the biggest companys in the world.
I accept your answer regarding the sync back to the AD since this is definitly not so easy. But there is device, group and password writeback, i see no reason why it's not possible to write back a user aswell. This would eliminate the need of a local ECP aswell. When you need to move the user from some sync OU to the destination OU, that would be a manual task which is way faster for some customers.
To finish this: I have no problem on how it is, but a lot of my customers don't like it, and there is 3rd party software which solves all problems. I think Microsoft could copy/buy these within a few months instead of forcing customers to Azure only while not everything is possible there.