Correct on both counts. One con of hosting multiple dependencies locally could be that parallelization of downloads is reduced. There's always a flipside and each situation warrants analysis!

So many of these discussion points are discussed at https://developers.google.com/speed/docs/best-practices/rtt

I think for popular CDNs hosting popular libraries(google's jquery for example), the browser would use the local cache. So, I imagine there's a benefit to using a big CDN for those cases.