I believe they often do it because they don't have large enough equipment to do what they want with all malt. I'm not sure many breweries do extract for all their base grain, mostly as a supplement. I can also imagine breweries that don't use extract at all except for the rare barleywine or something similar where they need huge OG's. The only other option would be making a smaller batch just for the mash tun size, but that would make all the other equipment oversized, hence inefficient.
Really, the only two drawbacks of extract that I see is its price and it limits creativity/recipe formulation.