Okay, UpdatePanels aren't dangerous, but they do use more bandwidth and server CPU than a simple web service call. I figure a web developer ought to know what is being sent behind the scenes, but I can understand that a lot of people don't. UpdatePanels require sending the ViewState and building the control structure behind the scenes, as well as doing a subset of the ASP.NET Page event model, which means more data being POSTed behind the scenes and it takes a little longer to do all that processing.
UpdatePanels are easy though, and for some things in ASP.NET it is so much easier to use. But Encosia does give us an awesome was to still use ASP.NET User Controls within web services and jQuery gives us some awesome tools to build pages dynamically without using UpdatePanels here: http://encosia.com/2008/02/05/boost-aspnet-performance-with-deferred-content-loading/. It's not quite as easy to maintain as UpdatePanels, but it's still very easy to use, and also very very fast.