This can be bad for performance. Designing fonts is both difficult and costly. Doing fonts with coloured borders, drop-shadows, etc exacerbates the other two problems significantly. You can use fancy lighting models, environment mapping, texturing, etc. If used in a 3D world, you can perform collision detection with them.
Geometric fonts scale nicely.
They don't exhibit bad aliasing artifacts and they don't get 'fuzzy' as they are enlarged. Typically, the entire font is stored in one or two large texture maps and each letter is drawn as a single quadrilateral. If you use MIPmapping, then scaling the font makes it look a litte fuzzy. If you don't use MIPmapping, it'll look horribly aliasy. Texture fonts can be rotated and scaled - although they always look 'flat'.