I use both- my PC running Cubase with a 24 bit Mia card replaces thousands and thousands of dollars in hardware (although the Mia doesn't have multiple analog outs, but I don't need them- mixdown occurs internally).
I'm still not a huge fan of softsynths, and use a rack of modules controlled by a crappy midi controller.
The real advantages to using the PC is that if I want to run an EQ and compressor on each track, I can do it without buying as many EQs or compressors as I have tracks... the only limit is the CPU. Once everything is digital,it stays digital. Editing and tweaking audio on a PC is easier and more exact than using most hardware. It is easier to backup projects with PC. Mixdown occurs internally without extra D/A conversions. I can save countless remixes of each song without taking up tons of DAT space (by using the same audio pool for each song, I'm just saving the song). Easier to burn to CD, easier to master.
There's quite a learning curve to using a PC, but the same could be said for some hardware.
I actually sold my sampler after switching to PC.
On the other hand, if all you want to do is "make beats" I know people who swear by the MPC2000... but even at that, the audio needs processing.
On the flip side, as a former hardware user, I have to say that using a computer takes some of the spontaneity out of things- I need to plan ahead a bit better, I'm back and forth between the midi controller and the mouse, and there are little computer issues that crop up from time to time- ie. I would NEVER take a computer to a live show!