The Microsoft platform has worked very well for Loopt as well, though I can't claim we're good enough to have had only two bugs since launch :) As for cost, we spend less on software licensing per year than we do for our least compensated employee by a substantial margin. We've also had no issues with security thus far (fingers crossed).
Just out of curiosity, why did you choose the MS platform? I mean what advantages did it provide over the open platforms that would actually be helpful for skilled programmers?
SQL Server 2005: The only other options were PostgreSQL and Oracle. MySQL 5 had just come out and all the basic database features I intended to use (stored procedures, foreign key constraints, etc) were new, and thus untested. Oracle cost a fortune (I think I was quoted $65k/core as my only licensing option). SQL Server was a natural choice.
ASP.Net: At the time the only other well tested equivalent was Java, and my brief examination of it led me to believe it was basically equivalent for my purposes. It wasn't worth the switching cost. Rails was really new and also required full access to the database, which I don't grant to our web servers. PHP is extraordinarily difficult to keep clean when working in a team on a large project, so it wasn't really suitable (especially for the cell phone portion, which uses packed binary protocols). Python web frameworks were still in their infancy, or I would have chosen it.
C#: It's fine for a statically type language. I like that it's similar to Java, but a little more relaxed (delegates, unsigned types, etc.). I'm actually a horrible typist (20 WPM on a good day), so intellisense (increase speed) and compilation (find typos) were key. The .NET framework is actually really good and rivals Java's. MSDN docs are much more useful than JavaDocs in that they actually contain examples :)
Now, don't get me wrong. We're not a 100% Microsoft shop. We use Erlang (fault tolerant, distributed session state store), PHP (tile serving), Memcache, Apache (static content and PHP), PostgreSQL, Ubuntu and FreeBSD.
As for open versus closed source, not having access to the Microsoft source code has yet to be an issue. We've had to work around things once or twice (usually because what we were doing wasn't in the spirit of the framework), but we've never encountered an actual bug, and Microsoft's products have always worked as documented thus far. I'd rather not need source access than have to use it to get something working ;)
Ironically, the places where we've had problems are on the open source side. PHP x86 != PHP x64 (same release version, different behavior) on some distributions (cough RHEL cough), and PostgreSQL on FreeBSD 6 is anything but straightforward (max connection limit problems).