The greatest benefit for a student who is able to graduate in less than four years is the opportunity to save money ... up to about $50,000 for those who attend the priciest of the private schools. (Obviously, I'm counting not only tuition, room, and board, but also student activities fees, books, and pizza.)
For some students, a speedier undergraduate experience also means an express route to grad school or a career. In other words, if you know what you want to do and are eager to get going on it (e.g., law school) then you may want to expedite your time as an undergrad.
For institutions, early grads are only problematic if the trend becomes too popular. When students are paying by the semester and not by the credit, then an undergrad who accelerates will often take an extra-heavy course load (e.g., five classes instead of the standard four, at some schools) and the college doesn't receive extra compensation. If too many students want to graduate in less than the traditional four years, it can make for crowded classrooms and overburdened professors.
Similarly, if early graduation is your goal, then depending on the college you attend, you may--or may NOT--be able to get into all the classes you need to take within the time you've allotted yourself. Also, some early grads also complain that, while an accelerated program is a great money-saver, they don't have room in their schedules for "fun" electives or they don't get to take part in special senior-class traditions.
One student I know planned to graduate in three years so that her parents could afford her very expense liberal arts college. However, because of this, she would not be able to spend her junior year abroad as she had hoped. (College rules did not allow it for accelerating students.) So, as a compromise, she went on leave for a year and taught in China (where she even got paid!). Thus, she was able to experience living abroad, save her parents lots of dough, and--because of the time off--will graduate with her original class next May.
So, if you do think that acceleration may be right for you, keep in mind that there may be ways to work around whatever pitfalls you encounter.
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