Dungeon Finder, and later Raid Finder, were added to the game to make experiencing group content easier for casual players like myself. The disadvantage, obviously, is that it places you in a pickup group unless you queue as a group.
Overall I've found it pretty useful since I have never been very social or hardcore myself, it was often annoying to have to keep typing in LFG in the olden days. That, and it can be handy to quickly get replacement party members (compared to in he past where you pretty much had to disband if someone left halfway through). Also, the Need before Greed default loot rules makes ninja looting a thing of the past.
That being said, I know there are MANY players (particularly Tanks and Healers) who, even in today's world of severely nerfed dungeon difficulty, just flat-out refuse to use Dungeon/Raid Finder because the odds of you having a "bad experience", or even just a "semi-annoying" run, are just too high. And I completely understand - anyone who's been using group finder tools for long enough has had at least a couple (or a couple dozen) traumatizing PuG experiences.
Because the single biggest problem with Dungeon Finder PuGs, as countless others before me have stated, is that you're rolling the dice on whether or not the people you end up grouped with will know what they're doing, will be understanding of you if you're new to the dungeon, etc. The analogy I would draw is that it's like other drivers on the road in a way - more often than not, the rest of your group will have no vested interest in making you happy, so depending on their level of jerk-ness, they might have no problems with being downright rude to you or just plain ditching you in the middle of the run.
Like I said though, I don't know if it's really a WHOLE lot better in guilds (the 50 DKP Minus Onyxia guy comes to mind) since I'm not very social in-game to begin with, and the guilds I'm in are by and large social ones rather than raiding guilds. Plus, I don't always have the open schedule that being in a Raiding guild requires. So overall I'd say that Dungeon & Raid Finder are useful, but I can certainly see why many people avoid them like the plague.
I'll always remember Stormwind chat from way back when I was levelling my first ever character, in the good old days of BC. Half the time the people would be like "LF non-failboat heals for daily H" or "LFM Kara, must be at least T5, PST"