Convenience having it ON the phone, yes. I often WIFI Tether my son on my old D2 off my RAZR while we're driving long trips. Keeps him busy and happy, keeps me happy and focused on driving! Frankly, there ought to be an insurance discount that pays for the full-blown Verizon Mobile Hotspot for just that purpose!
Additional costs, yes. Verizon charges an extra $30/month to add the "official" Hotspot feature, and I believe the stand-alone Verizon Mobile Hotspot is about $50 per month. Personally, the convenience of having it on one unit and the lesser cost make the stand-alone a no-go for my purposes. I am sure there are others out there that would get more "play" out of the portable one, using it to tether not only their phones (and therefore cut back on data if not on an unlimited plan), and also for a laptop, notebook, or tablet as well. I am sure it works better if you have 3 or 4 people all on it at once, rather than trying to saddle the RAZR with all that responsibility.
Finally, there's the new subject of the tiered plans that are coming, and the upgrade kicking you out of the Unlimited plan. These are a way to offload the big abusers, the ones who tether their laptops to the phone and do torrent downloading of music and movies, as well as other high-data users such as online gamers. IMHO, together, these two groups have effectively taken what was passively ignored by Verizon even though technically a breech of contract (Foxfi and other similar tools), and turned it into losing the Unlimited plan altogether.
I will say here, I have NEVER gone over even 4GB/mo even though I have the Unlimited plans on both parental phones, so I'm not an abuser (except on the very lowest level of actually using the hack to gain access). I see myself as someone that drives 65 in a 55 zone, where police won't pull me over unless I exceed the limit by 15mph, but if I am driving erratically or have a light out, I am at risk there. Analogous to the "free" hacks for wireless tether such as Foxfi, where using it is like driving 65, but using it and abusing it is like doing 80!. In other words, moderation will allow you to fly under the radar, so to speak, but use 85GB/month as some have reported, and you'll create problems for yourself and everyone else.