I've got a lot of experience here. (sorry for being late)

We started as you did, using SQL Server to send mails. This works fine from a capacity standpoint. SQL Server can handle the load. Where you fail is with the compliance and management of mail from there.

We have moved through a few programs (controls and desktop things), to Lyris, to a custom setup.

Personally right now I'd look at some small service that integrates with what features you give people in a database app. I'd spend time building a way for them to create mailings and an interface to send them to a provider of some sort.

Take it from someone that's fought complaints, bounces, blacklists, etc. Use a service.