The problems seem to be that they can be shrill (I'd imagine for single coil players) and that techs don't like em (hard to work with and = less business)
There are some high end guitars from other manufacturers that only ship with stainless steel frets. I think it should be an option for EBMM. Then again, if the frets wear down, with the next replacement one could install them.
More expensive. As Siddius mentioned, techs/luthiers can't use the same tools replacing them as other fret wire (cutters for example). But they are definitely more durable and should last multiples of regular fret wire.
YES YES YES
I've asked here why there was not even an option back in 2009 I bought my JP6 and BP got upset
I bought 2-3 months ago a JP7 with SS frets and ebony fretboard and now I'm selling all my other guitars (JP6, Luke, JP100D, JP70) because of the SS frets and ebony
SS frets are out of this world, can't even look back
No down sides here. And, not more expensive over the life cycle of the instrument. If that point becomes argumentative I would just say they are worth it.
The concensus amongst the best techs I know that have worked with is that here is no tonal change. It is a little more difficult to work, each part of the process takes a little longer (obviously increasing expense), and wears out luthiers tools faster (which adds more expense).
As a market-wide thing, if people were really willing to pay for it we'd see it more often but most of the guitar market is hobbyists who never need refrets and won't pay extra. Most of those who do get occasional refrets done would rather pay for a refret than the extra cost on the new guitar.
It's not as cut and dry as most people here seem to think. The feel, for one thing, is entirely different. Very "glassy" and smooth when bending, but for some that doesn't feel right.
Another thing to consider is that over time, frets can sprout out of the end of the fretboard, or change shape, as the fret has some degree of memory of when it was bent more or less. The harder the alloy, the more memory and more force it makes to get back to where it wants to be. Nickel Silver is easier to work with so it can easily be hammered down. SS is not as easy.
They actually do have SS alloys that are on the same level of hardness as N/S, but they aren't used because they are really after the durability change, not the resistance to corrosion.
As for sound level, there is sound in the air, and then there is what comes out at the amp. Most guitar amps/speakers top at a 5.5khz, or 5khz. some even only go to 4.5khz. You can get some high end added but it is often beyond the level that will go through the amp.
With acoustic guitars, this is entirely different, which is one reason why Taylor guitars experimented with but ultimately decided not to use the frets. It's like with bridge materials, nut materials, slide materials: you get different sounds by using different materials. And in this case, there are no electronics in the way to filter that out.