Their both good projectors, where sometimes the 8350 might be a little hit or miss due to convergence issues, that you may encounter. Some experts think the 1070 has a little better picture, and it's hard to beat for the price if the dlp rainbows aren't an issue to the user, and it will fit in a particular setup.
"its not an ideal projector for a controlled light home theater", I don't think that is the case, but it may not take full advantage of a completely dark environment, as much as a more expensive, ultra contrast pj, in the $2k-3k price range, would. So take a chance on an 8350, or deal with the 10070 pj being setup infront of the seating area. One advantage of it being farther away from the seating, the fan noise won't be as noticeable. If it were me, I'd keep the 1070, but if you get a good 8350, you'd be happy with that as well. GL