Although in the long-term, it means you aren't advancing your career. If people want to become a GP or consultant, then they can't just work as a locum SHO or locum SpR forever.
But the major downsides are
1) Short term locums - the ones where you hear the highest rates coming from - obviously lack any annual leave, study leave, sick leave, maternity/paternity pay, etc. That makes locum rates seem rather higher than they actually are.
2) Viewing the pay as good is rather a short term view - whilst it may be way higher that what you can earn in training, that pay does increase fairly quickly, and a consultant's regular, daytime pay is almost as high as SHO locum rates.
3) If you are working in lots of different hospitals you know no one and its kind of a sad existence. Although on the other hand, taking a longer term lower paying locum can have the inverse effect
4) No career progression as mentioned. Very few doctors would want to stay at a very junior level, being ordered around by junior registrars, way into their 40s and 50s
5) How long will the current environment last? Sure locum work at the moment is incredibly available and well paying as the NHS is desparate for doctors, but will that be true in 10, 15 years time? Will you start having to commute vast distances, work lots of night shifts, work in places and roles you don't like, etc? Will locum work even exist in its current form - the government is incredibly proud of itself for pressuring hospitals into leaving rota gaps rather than hiring locums. Might it take this even further as the NHS funding crisis deepens?