When does it make sense to use staff augmentation or on demand teams instead of hiring everyone in house?

Staff augmentation is useful when your workload is uneven, you need a skill for a limited period, or you must move faster than local hiring allows. It lets you flex capacity up and down without committing to full time headcount. For roles that are critical to your long term product vision, in house or long term dedicated people are usually better, because they accumulate deep context. Many companies combine a small core team with on demand specialists around it. The key is to keep product ownership and architecture in house, while using external talent to accelerate delivery.