The answer to that is a qualified "yes" depending upon the circumstances. There are, however, situations where is doesn't work very well. The main considerations are:
Lets look at #1 first: This topic has been touched on in several other pages on this web site. The number of people involved the the decision process is a critical factor. If there are a lot of people involved (by this we mean four or more) then it really becomes difficult to design a logo via the Internet. The difficulty involved goes up exponentially with each additional person after four. If the answer to this question is "yes," our advise is to hire a local artist for your needs.
#2: If you are under a very tight time constraint to get the design done, the job might best be left to a local designer on your end who can devote his/her entire workday to your particular project. You can sit down with the designer and review concepts on the fly. This can really speed up the process when time is of the essence. Color and text issues can also be resolved much faster this way. Our firm usually has 4-8 design projects going on simultaneously, and although we can usually devote extra time to rush jobs, we can almost never devote a significant amount of time to one particular art project so that it can be completed in just two days. Note: This is where we can interject a lecture about not using effective time-management. A logo should never be given such a short time frame for completion.
#3: If you have a finely-detailed logo in mind you should probably go with a local designer if it is needed quickly.
#4: If you are very precise, methodical and need to micro-manage every minute detail, but all means hire a local designer.
#5: If you are an artist/graphic designer, you should probably not use this service. In this case we absolutely recommend that you hire a local designer and co-design with them in person.
We hope that the above did not give a negative impression about doing design via the Internet - in most cases it works fine. We just want you to know that there are certain circumstances/situations where it is not recommended. Sometimes there can be no alternative to hiring a local artist on your end to design your logo. Obviously the cost involved will go up significantly if you have to hire a local designer.
The advise above can be used to determine if designing via the Internet will work for you.