They're heavy and hot and make your center of gravity higher. The straps can chafe. I have three, I use them all the time for outdoor events and running, but I use one cycling ONLY when it's extremely hot or when I know I'm going to be riding more than two hours somewhere that I won't be able to refill my bottles.

No one will make fun of you. Lots of people use hydration packs, you're just in the minority is all.

Re: expense and waste, when people talk about water bottles we're talking about reusable bottles. Any bike shop or sporting goods store has polyethylene bottles that fit in bottle cages. Some people prefer other materials like stainless steel, aluminum or other plastics, but those can be harder to find, and also harder to hold and drink out of since they're not flexible.

As far as cleanliness goes though, I'm not sure a hydration pack is any more sanitary than a bottle unless you use a bite valve cover, and those can be pretty unwieldy on the bike. My experience is that the bite valve is always dragging in something, which is why I use a cover.