Hi Levi,
> It seems to me that we should be able to install Portal and Data Store on two server VMs here on site, and federate with the off site GIS server. I'm wondering if we can in fact do this, and are there good reasons not to do it this way?
While this might be technically possible, I wouldn't recommend it. Deploying the different ArcGIS Enterprise components between two organizations' network infrastructure is not a good idea. To ensure that communication between the different Enterprise components is good, you would want to ensure network access between them is efficient.
Distributing the Enterprise components between two organizations' network infrastructure would likely not achieve this, because you will have to consider network access/security/authentication, bandwidth, etc. between the two networks. You also want to federate the GIS Server with Portal, this will need a good communication pathway between the 2 components; not likely to be easy between two organizations' network infrastructures.
EDIT: Additionally, there might be technical issues with a enabling consistent (single) domain address for your Enterprise deployment, because the different components would be deployed across multiple network infrastructures.
If you're a school district, using an ArcGIS Online organization might be a better option as there would be less infrastructure maintenance needed for you to do.
Hope this helps,
