For starters they slow distribution as only the uploader can seed it for starters. If it was torrented as separate files then everyone else with a copy of the disc can help out by seeding.
Also, while it stops some people from not downloading the NFOs and DVD-ROM content (which was Rikter's problem here), it also stops people from downloading the NFOs and DVD-ROM content!! I'm sure I've managed to completely confuse you with that supposed contradiction, but it is really quite simple. I've received discs from a few sources (as most of the week I only have dialup), and sometimes I've found the discs sent to me to be missing this additional content, either because the provider only copied over the movie and not the disc or because they themselves downloaded it from another source missing those files. Now, I could easily fix this problem on my disc before distributing it further if the torrent wasn't an image, I start leeching, it would figure out I have most of the files and only download the small few I need. I could then of course help seed and I can then distribute my copy of the disc.
So I think all ISOs do is make it hard for legit downloaders who want the NFOs, etc, in an effort to stop the untrustworthy. Doesn't work as those few can just delete the files from the image anyway (in an effort to make it a smaller download). What happens when a legit user really keen on redistribution ends up with a copy without the extra files? They can't fix their copy easily so they are forced to send out a ton of discs unfixed... which will of course possibly end up back on other torrent sites! In the end the 'fix' for the problem causes the problem.
Just so you know, this isn't an airy fairy arguement, it is actually the situation I'm in right now. I have a handful of discs I know are missing a couple of files, I already have a couple of PMs here asking for copies of those discs and I'd like to help seed some of them (I do have broadband on weekends). I've been forced to write to all the disc creators to try recover those files, meaning those requesting discs are having to wait (as I won't send them discs without NFOs, even if they don't know what they are).
So yeah, I'm all for no ISOs, speeds legit distribution (which could flood the 'market', meaning a lack of a need for unlegit distribution) and works for users on dodgy computer systems!
[edit]That first sentence actually makes sense now that I added the magic missing word![/edit]
[edit2]Just another thought, what happens in several months when the torrent is dead and then several leechers then want a copy? They would ask on the MySpleen forum of course for a reseed, but I'm just wondering how many people keep the original ISO file around? I know I wouldn't be able to, I'm forever running out of disc space. So FriendlyFred says that he will help out, but can't recreate the exact ISO file so he can't distribute via MySpleen, instead taking it to another torrent site. So it ends up elsewhere not in ISO format, creating the same problem of allowing it to be downloaded with the NFO, or if FriendlyFred isn't the smartest cookie then he may simply not include those files in the torrent to start off with.[/edit2]