There are both advantages and disadvantages to EVFs. The very best ones with high-resolution and high-refresh rates are actually quite suitable for most uses when well-implemented.
The main disadvantages are:
- Lag: There is a short lag between action happening in front of the camera and what you see.
- Dynamic-Range: EVFs are small LCD screens and have limited dynamic-range.
Lag is a problem for action and photography where following action is critical. The limited dynamic-range means that it is possible for areas to be blocked up (either fully white or full black) without details even though there are details which will be captured.
EVFs have advantages too:
- WYSYWYG: With Exposure-Priority displays, like the ones on Sony SLT and NEX cameras, you see something much closer to the results on your display before shooting. With a OVF, you see with you eye and therefore there is no way to know how the image will be exposed. The same is true of White-Balance.
- Sensitivity: EVF are electronic and can have the signals amplified to produce a bright image even in dark conditions. This makes them usable for framing with ND filters. For example, with my ND400, there is still an image shown while I cannot compose with a OVF with that filter on.
- HUD: An EVF can show detailed information overlaid on the image, including a Live-Histogram and detailed camera status. One can also navigate menus and change almost any setting with the camera at eye-level.
Some things are on the fence:
- Focus: With 1.5 - 2.4 MP EVF it is now quite easy to judge focus. The same cannot be said about most EVFs which have a mere 200K-350K pixels. Additionally, a lot of cameras can magnify the EVF to assist MF and some can highlight high-contrast edges (focus-peaking). The remaining problem though for MF is lag. Just like the EVF lags action, it lags behind the focus-ring too and on some cameras I find it rather hard to get focus exactly right without back-and-forth movement.
- Coverage: The vast majority of EVFs show 100% coverage. For OVFs, it is sadly the minority.
Keep in mind that implementations vary widely and plenty of EVF are not Exposure-Priority and some do not properly boost the image brightness in low-light. There are also EVFs which do not show a correct Live-Histogram.
There are also some annoyances such as the need for a camera to be on to see something. With an OVF, it is possible to frame and focus (except for lenses with fly-by-wire focus rings) with the camera off. Finally EVFs require a lot of power, often as much as having the rear LCD on, despite being smaller. This makes the battery-life similar to using Live-View and roughly half of what it is with an OVF. The actual drain depends on the specific camera of course.