So, recently I've been hearing a lot of praise in my local shop for Magic Online (MTGO). I, for one, am not a fan of the system. I've never actually played MTGO (I'll get to my reason for that in a bit) but I have seen other people people play and I have my qualms about it. So, here are my reasons for why I don't like MTGO (but won't get upset if other people enjoy it).
1) Real money, unreal cards. This is the same issue I have with any online game that basically requires in-game purchases in order to enjoy properly. The $10 cost for the program itself is understandable since it probably took a lot of developer time in order to refine how the program applies the different rules and triggers in real-time. It's the paying for absolutely everything else that I have an issue with. Clearly I'm wrong about people being willing to pay for digital versions of cards, given the popularity of the system, but I just see it as a huge money grab. In my opinion, if you want to play Magic online with different people, I would suggest using a system like Cockatrice or Lackey, which is what I use instead of MTGO. They're both free and give you the entire library of cards. They don't apply the rules for you, but as I point out next, that may not be a bad thing.
2) When everything's done for you, you learn nothing. One thing I've heard a lot of people say is that MTGO is "great for new players since they don't have to remember triggers". This is just a bad idea and a dumb statement. If you do something for someone, even if you explain what you're doing, if you never let them do it for themselves, they are going to forget quite frequently. I've seen a couple people come into real Magic games having learned only on MTGO and get flustered because their opponent isn't pointing everything out to them like the program does for them. It's like netdecking, only with the rules. I'd suggest that people learn the paper game first and then go to MTGO in order to watch how the triggers and interactions they learned on paper function at higher-level play.
3) Without people, Magic loses some of its magic. I don't know how many people this applies to outside of myself, but I think that the people are a big part of the game. Being able to read (or tilt) your opponent can often make the difference in an important game. With MTGO, you don't know whether or not your opponent is smirking or shaking when you drop your bomb. You can't see if she's doing calculations or just stalling for time. You can't hear if he's trash talking you or thinking out loud. That may seem like a minor thing to some, but you put yourself at a major disadvantage if you can't tell what you're opponent is doing/thinking because you can't see them. This is another thing I've seen fluster MTGO players in real life. It becomes so easy to to tilt some of them just but simply talking about the latest spoiler or something similar because they're not used to it.
Like I said before, I'm not going to try and take away your enjoyment of MTGO. If you like it, you like it. These are just reasons I don't think it should be called "better than paper Magic".
EDIT: Never let it be said that I don't admit my mistakes. Apparently, you can trade in a complete set of digital cards from recent sets in for a complete set on paper. While that seems like a good deal, I'm still sticking by my first point, since there are a big problem with this deal: unless you're a set collector (for which this deal still might not be great), you probably don't want a copy of every single card in a set. The question for most people will be: is buying the entire set of Theros worth the Elspeth, Sun's Champion and couple other cards they want? Probably not.
Someone said that buying the entire Theros set on MTGO and trading it in saved them $40 (so, it cost roughly $130US), which isn't too bad, but some people aren't as lucky. You see, some people don't live in the US, so we get charged international shipping rates. So, for this one guy's Theros set, if shipped to Canada for example, add on an extra $27 for shipping, another $3 for GST, and maybe a little bit extra if the Canada Border Services Agent decides to levy taxes against that package. So, instead of saving $40, you've now saved $10 and had to wait about 2-3 weeks (USPS is really slow coming up here plus WotC says it can take up to 10 days to process your redemption ticket) in order to get your complete set. That's just for Canada too. I can't imagine what the duties/taxes going to other countries might be, but I'm sure it makes it even less worth your while. And, unless you're an aforementioned set collector, most of that set will sit dormant in a box while you use the 4-5 cards you actually wanted.
So, if you're an American set collector who only wants to collect the latest sets, this deal is great for you. Otherwise, you're pretty SOL.