I have been on both sides of this debate so let me be a little two faced here.
When I was younger, I pushed to build our own bug tracking system. I just highlighted all of the things that the off the shelf stuff couldn't do, and I got management to go for it. Who did they pick to lead the team? Me! It was going to be my first chance to be a team lead and have a voice in everything from design to tools to personnel. I was thrilled. So my recommendation would be to check to the motivations of the people pushing this project.
Now that I'm older and faced with the same question again, I just decided to go with FogBugz. It does 99% of what we need and the costs are basically 0. Plus, Joel will send you personal emails making you feel special. And in the end, isn't that the problem, your developers think this will make them special?
