Arduino Regulator: How hot is too hot?

Price of the product is one of the big movers, a switching buck/boost topology would be 75+% efficient...
But it takes several parts, controller, inductor, catch diode and voltage divider for output adj (optional)
and at least as many filter (better grade) caps as the linear one does, however the idea is not to provide a
general purpose power supply but to provide a stable platform from which to run a sketch. If my peripherals
draw enough current to heat op the regulator enough to notice then IMO I am doing something wrong as the
combined power and ground drop losses just might be enough to show up as noise somewhere else.
the linear regulator is basically a voltage controlled resistor, draw current through it at too large an I/O
differential and there is a GREAT DEAL of WASTED power... as heat in the regulator. At 9 v in and 100 ma load
the load Power is p = e x i so 10 ma for the regulator ( The '1117 is I think a PNP Pass type regulator, they draw
more current as the load current increases) and 100 ma for the load gives 110 ma x 9 v = .99 watts from the battery
and .5 watts for the load... So we have .49 watts wasted in the regulator as heat... 50%? Efficiency?

Doc