I'm not an SCX guy, but I do know a little about the system.
Most agree that the biggest con, not really a flaw, is that the digital chip for SCX is so large (it holds a solenoid and arm for the special guide system) that it's VERY difficult to convert non SCX cars to SCX Digital. If you like how SCX cars perform, and you like the variety of their cars you can buy, then this isn't a big deal. If buying other brands and types of cars appeals to you, then you'll find yourself in the unenviable position of having to scratch build parts of your cars to convert them. Most other systems require little more than solder and glue, and at most a little carving to make room for a chip to sit.
Yes, the SCX system is designed using magnetically effected reed switches to activate certain things, such as lap counting and pit lane entry. The whole track does lose power for a split second when a car crosses the line. This is most noticeable at the beginning of a race when all 6 cars cross the line at once. As the field splits up, it's less an issue. AFAIK, nothing can be done to change it, but you can minimize it by spreading out the field to begin with.
Other flaws are very subjective. Quality control seems kind of low to me, but as a result, they will pretty much replace any product sight unseen at no cost to the customer.
On the plus side, their guide-based lane changer system means that lane change tracks are very cheap compared to other systems, plus you can change lanes even if your car is sliding all over the place. Their guide system even makes it easy to make routed digital tracks because all you need to do for lane changing is change the depth of the slot.