I don't see many downsides to having all episodes released on one day, for Netflix or the consumers. After all, what does Netflix care if you watched 13 episodes in one day or over the course of 3 months? Either way you watched them, and you paid the monthly fee.
I find that I actually enjoy TV much more when I get to watch it on my own schedule. This is true from the early days of shows being released on DVD, when people were starting to realize that there were real benefits to being able to watch episodes back to back. In fact that is how I first saw 24. I watched the first season on DVD, and intended to start with just one episode, but soon found myself sitting up at 3 am with my laptop clicking Play again. I was completely sucked in. If I had watched the show as it originally aired, weekly or less often throughout the season, I really don't think I would have enjoyed it as much. Even now when I go back and watch seasons of shows that I've already seen, I find them so much more fun to watch back to back. It allows you to really remember and notice the little details that you didn't before. When watching on a weekly basis, I find that I forget enough in between episodes that that intense enjoyment factor just isn't there anymore.
So of course Netflix releasing all episodes at once is awesome to me. If I had watched Orange is the New Black weekly, I would have found it a great show still but I doubt I would have gotten as much obsessive personal joy out of it. I mostly watch serialized shows, so this type of new programming schedule is great for me.
As others have mentioned, the one downside is that it is more difficult to discuss the show with others when they are at different points, but I haven't really found this to be much of a problem since there are so few people in my life who are TV junkies like me. And those that are, I am usually always ahead of them in the shows we watch, so I don't have to fear spoilers.