I think the answer to this depends on the type of site you are running.

If you are running a site that is strictly trying to sell something i.e an online store, then you are likely to struggle from an SEO perspective.

If you run a content site (Blog, forum, portal, etc) then you have an edge that should point you towards SEO. (CONTENT)

I am not saying online stores cannot rank well for decent terms, they can! but it is a lot harder and generally more expensive.

So in summary, either do both or use SEO for content sites, PPC for online stores.