Direct fired RIMS is a common setup and definitely wasn't invented by Blichmann. My system is direct fired. I get the feeling it's becoming less popular in the last year or two, mostly because it's so popular to go all electric now, and direct fired wouldn't really work for electric (although I guess you could use an induction plate...)
As far as disadvantages go, with HERMS or a RIMS tube it's straightforward to use either a cooler or an insulated kettle/keggle for a mash tun. When you direct fire, most people don't insulate (since it could melt or burn). So you need to apply more heat to maintain temps, especially in the winter. As a result, I suspect I see more temperature gradient in the mash tun than someone with an insulated mash tun would see, even with vigorous recirculation.
That said, I love my system. Somehow it just seems more intuitive to me than the alternatives.