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The alternative is server only parties manually created and job elitism ala FFXI. People flagging up for hours. People not able to get into groups because there's not enough players willing to take the time to /sea all and invite. Groups being slow to come together because the leader only wants to put together a perfect party and that PUP or whatever the equivelent ends up being is not wanted. Waiting for a bard. Waiting for a tank on your server when there's one ready to go on another server but you can't see her.
The arguments for and against have been made ad naseum for every mmo since its inception, and the answer always ends up the same. The benefits just plain outweigh the perceived consequences.
That's really not a foregone conclusion. There are plenty of ways to ensure streamlined party play without falling on the double-edged sword of cross-server parties. Personally I don't like cross-server parties; I think it's a lazy bandaid on a gunshot wound in most situations. It might be a good solution if you're starting from a game like EQ or FFXI, but if you don't make the same mistakes those games did, you don't have the same problems.
For example, the insistence upon using a strict trinity system where healers and tanks offer more party value than damage dealers. This is a gaping design problem that, sure, could be improved upon somewhat with cross-server partying. But in a game where this trinity party dynamic is downplayed, or a different party dynamic is used altogether, it doesn't necessarily do anything but water down the sense of community.