It's horses for courses. I think the consensus is that a microphone is the technology of choice for acoustic instruments. It makes sense. The sound inside a guitar is different from the sound out in front of it, so even miking a guitar with a mic inside it isn't going to give you the amplified acoustic sound. Even the sound in back of the guitar is different from the sound in front. A pickup just picks up vibrations from somewhere and transduces them into an electrical signal. It won't give you the sound from the air in front of the guitar. You can't use a chisel to drive in a nail. Some people will try to do this anyway, and if you lend someone a chisel, you can be sure that's what he's going to do, unless he uses it as a paint scraper.

I have an fully acoustic bass guitar which has a pickup. It's kind of nice to have the pickup because the instrument is fairly quiet, but only in combination with the acoustic sound. When I recorded directly with a cord from the pickup to the digital recorder, it didn't sound anything like the instrument itself.

On the other hand, I have a solid-body electric guitar which I bought mainly to experiment with effect pedals. Without the pickups, there's barely any sound. That's just how that instrument works.

I must say I find it more interesting to make different sounds acoustically. I think the best PA system for acoustic instruments is the one that makes everything loud enough, but where you forget that it's there.