I think there's a subconcious stigma against any decoding done in the player because traditionally in the DVD-era, when you talked about player-decoding, you were talking about using the DACs in the player to output to analog. So that terminology really puts people off - I don't think anybody found that audio-out on a player to be a better-sounding solution.
In this new generation, the decoding is more akin to "unpacking." There is no conversion of anything. The player simply does a bit-by-bit uncompression which it then sends as PCM over HDMI, and the pre/pro can do its processing magic. When people say HDMI 1.3 is important because of the bitstream issue, it's much like saying that one particular computer is better than another at unzipping a file. Unless there is something substantially wrong with your computer, error rates are completely immaterial.
The only issue I can think of is that you are committing yourself to an expensive HD player in the long run. If you're getting, say a high-end Rotel Blu-Ray/HD-DVD player, there's absolutely no chance that they would leave out decoding in the player either. However, when Blu-Ray and HD players are in the $150 ranges, this can be a problem, in that you would always need to fork out extra dough to get a high-end player with decoding capabilities. So if you get a HDMI 1.1 AVR, you're committing yourself to getting a $300-600 player even when prices on the generic players may have dropped to the $75 range. That's the only drawback I see.