Closing the loop in the controller and using an analog signal has been the industry standard for the last 30 years or so. Today the highest performance systems use an all digital system over a network, using one of a few communication protocols.
I still use the analog method and close the loop in the controller, and it's my preference to put the feedback device directly on the load for maximum positioning accuracy.
With the hobby class servos that use step & direction signals and close the loop in the drive, there is still some advantage in that the torque curve is much better than a stepper.