Lack of bandwidth reservation makes it hard to offer network performance Service Level Agreements. First, it is difficult for the service provider to offer a guarantee of network throughput using native Ethernet. As pictured here, the service provider has configured two VLANs for customers A and B that extend across the metro network. Nothing in native Ethernet or 802.1Q prevents customer A from acting as a bandwidth hog and ruining any potential bandwidth Service Level Agreement with customer B. A service provider could implement link-level controls on customer A, or use 802.1p to create a higher priority for customer B's traffic. Second, native Ethernet provides less than ideal resiliency features.
Ethernet relies on spanning trees to provide network resiliency.
Unfortunately, spanning trees are not a good solution for Metro Area Networks. Rapid spanning tree technology is an improvement but still taps out at about a full second for reconfiguration. Finally, the VLAN approach does not scale. From a service provider's perspective, 802.1Q's limit of 4096 VLANs per network is very significant. It creates a serious upper limit on the metro TLS business model.