There are *far* greater experts than I, whom I am certain can (and probably will) add more, but as I understand it, it is economical in terms of memory space, but a poor trade off in terms of quality if you want to do much with the image later (eg enlarge one part of the image) or if you want really high resolution photographs or have a large print made. Memory is cheap enough that I always shoot & save in the highest possible resolution and then reduce from there if needed - for example for emailing smaller image files.
The short of it seems to me that you save space, but lose flexibility with saving in medium format and I'd rather buy a larger memory card than compromise on what I may want to do with an image later. MYYV.
Experts, correct me if I'm wrong, please.