Here in the South they're popular, especially during the summer months. On a lot of our rural rides it can be "a fur piece" between places/opportunities to refill your bottles.

Many riders like them for convenience... especially if they're not comfortable reaching down to get their bottle out of the cage, drinking, and putting it back while pedaling down the road. And as you noted in your original post, there's that issue with "Belgian toothpaste."

They can be heavy, sweaty, etc., but it's a matter of personal choice and comfort. I've been using just bottles for the past year and a half or so, but still have my 70 oz. CamelBak stashed away for those long summer training rides before the Hotter 'n Hell Hundred...

Tom