Other than making communication look like a comic book and creating server-based latency issues, what's the real draw? Why can't we progress? How's it any different then looking two centimeters over and recognizing the name of the person you're engaging.
Yeah, in heavily populated areas (especially if you don't do a spatial filter) it can be tough to hear what the person next to you is saying, but isn't that realistic? How many bar-room scenes have you yourself gone to where the cacophony is so loud you can't hear the person you're talking to or likewise? There's a real solution to both of these problems: Step outside.
Consider bubbles in heavily populated areas; just seas of whitespace to the point you can't even see the interface. Then you have people who type up paragraphs and insert emotives in their speech and you've got bubblesort issues, climbing as high as a sequoia.
For me, its all about seeing the words my character would say "Coming out of" her. So when I type "Hello!" and the bubble pops up over my head, it helps me feel like my character is actually saying it.
Its boring to me, to have to go off a chat box, with no connection to my character other than "Selique:" There's no personal connection to my text that ties it to my character's body. The only time I use chat boxes in other MMO's is to recap, or read up on text I missed.
Also, I like feeling that other characters have the same connection to their "Voice" that bubbles imitate. I in no way associate Chat bubbles with comic books, as I never read any. To me they are all about connecting speech from your character to the environment and making it personal.
Plus, its easier to see a big chat bubble over someone's head and know they are talking to you (Because they are standing right there) and have your attention on the game world instead of focused on a small chat window. I'm not RPing on MSN Messenger after all!
As for the technical problems, no other MMO I have played has had issues where its been "Seas of whitespaces" SWG's chat bubbles were never an issue and I attended events with hundreds of players all chatting at once. So I don't see that argument at all.