Because of the fact that the RDBMS maintains a cache by sql-text... the more distinct sql that you pipe into your database, the bigger this cache has to be. (In oracle, you can investigate this cache by querying the v$sqlarea system view.) As this cache grows bigger, its hash buckets spill over, it consumes valuable shared pool memory, and various other Bad Things occur.

Many people new to database development (and not using bound values), eventually hit a wall where their database seems to fall apart because of these problems. This is perhaps one of the least well understood causes of RDBMSs failing to scale.

Anyway, just one more piece of fuel for the "use binds" fire.