Well.. they are working on the next version of Entity Framework which has a lot more features than the current L2S. Do you want to go with a technology that MS is actively enhancing or do you want to go with technology that MS declared it will not enhance anymore and has less functionality than its successor and where we have doubts how well it will be supported in VS 2010? Assuming you move forward and stay current.

I trust my hand optimized SQL than a black box like L2S. I am sure a lot of SQL experts agree with me. It's the same debate whether you hand craft your own html or you prefer to use a tool like Dreamweaver which creates the html for you. Everyone chooses the tool they prefer but  no one can say the days of hand-optimized HTML is waning.

A stored procedure is just one or more SQL statement. You can make the sp have SQL that's exactly the same as the SQL generated by L2S, worse or better since you have total control. You can force the SP to use certain hints to override the database optimizer if you know for sure your plan is better than SQL Server's. To do this with L2S is a pain and if you know when to override a plan which is rare, you're an SQL Server expert.

 There are many times when you want the database to do all the CRUD in a single SP instead of possible hundreds or thousands of sql roundtrips between the client and database which can become very expensive. Stored procedures will always win in these situations. Compiled SPs, security & caches are another story.