FOCAL LENGTH MULTIPLIERS
Is this a good or bad side effect? Well the answer depends largely on the goal of your photography. Ideally we would like as many mega pixels as possible to be captured on the sensor. However, if you start the debate with a fixed number of mega pixels, then when using a large zoom, the multiplier effect is like getting a free percentage zoom without any real drawbacks. However, when you want to take a wide angle shot, it will require you to have a wider wide angle lens. This is not only more costly, but leads to distortion in the image.
Different cameras have different levels of multiplier effect. Probably, over time, this issue will disappear, but for now it is an important consideration. Currently the main multiplier effects are none for full frame cameras, 1.3 (Canon EOS 1D Mark IV), 1.5 most Nikon consumer grade cameras, 1.6 most Canon consumer grade cameras.
Observe the following images that demonstrate what a 1, 1.3, 1.5, and 1.6 multiplier will have on the same photo.
Clearly, having a multiplier effect when trying to get a wide angle shot is a disadvantage.
However, observe below the benefit it can been when trying to zoom in on your subject matter.