I record both ways. Depends on the sound I'm going for. Michael Hedges was a good example of a player who used a blend between a mic and PU to be able to track hammers/pull-offs to great effect--while also not sounding canned. I would say that mostly I prefer the "air" that microphones add to the sound. Even with the "best" on/off-board processing, there will always be a brittleness and guitar noise that can be a challenge to control.
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