2) Depending on your investment abilities (which almost everyone thinks they are experts at and few people are readily willing to admit that they aren't), you can loose a lot more money a lot quicker in stock market speculation.
3) For some people, have more readily available cash on hand means that they end up spending more rather than really saving for investment. If you have a bunch of bills piled high, it sometimes can sort of force you to have more discipline (though some folks have proved to max out other debts and exercise no discipline). For example, I see so many times among peers that are supposedly "saving" for a home, only to blow a few thousand here and there over time on new toys because they have more money at disposal. Net end result: still no money for a downpayment.
Max out your pre tax savings accounts, perhaps open a few roth/iras, and then after that it's really a personal decision imho
