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1. They take up valuable USB space.
2. They can get lost.
3. They can go bad.
4. Recovery policies differ from developer to developer.
5. Developers tacitly assume you are a pirate who can't be trusted not to share your libraries.
6. YOU have to purchase an additional piece of hardware for THEIR protection, not yours.
7. They expect YOU to purchase a new dongle every couple years to avoid failure.
8. To prevent having to pay exorbitant replacement prices, some developers make YOU pay for insurance for THEIR piracy protection.
I nominate this post for best summed up post about why usb dongle suck