I found out a serious issue with server-side baking...
It becomes impossible to adjust your avatar's height and bounding box (X and Y size).
I described the issue and its consequences in
this JIRA (that should be open for anyone to see): please vote for it
and follow it (Lindens count popularity from the followers number), so that we don't see a very bad regression forced down our throats together with server-side baking.