I'm not aware of any disadvantages from using categories/tags (yet). Here are some of the advantages that I'm aware of:
Selectable
Right now, you can put things like owner and department into an annotation. However, with tags, you could actually select a particular owner or department and bring up all virtual machines that belong. It's almost like an enhanced version of folders - without the 1:1 limitation.
Flexible
Categories and tags can be used for more than just virtual machines. As an example, you could group all your datastores into different tiers.
Enforceable
You can set rules to govern how categories and tags can be used. For example, you wouldn't want someone to have the ability to label a virtual machine as a tier 1 datastore. You can also define what tags are available for each category so that there's consistency in the metadata, whereas an open text field opens the doorway to misspellings, etc.
Addtionally, I think tags can be used in conjunction with saved searches, basically giving you the ability to create "smart folders" of items that meet certain criteria and adapt as objects get added or deleted from the environment.
Hopefully this has been useful.