There is no reason not to use urxvt in the normal mode, as it behaves just like xterm would (not exactly of course, but one crashing won't lose all of them).
no, no reason not to use plain urxvt without the client/daemon bit.
at the time, I think I was on some kind of network where urxvt's terminfo wasn't likely to be installed anywhere. I know I could install it everywhere in ~/.terminfo or whatever, but it was a pain to get to a new host and realize that I hadn't set it up. I went back to xterm.
Also, Is there any reason not to use just urxvt (without the client/daemon setup)? I've never had a crash that has brought down all of my clients, however.