Pinyin is great. You can type with it. You can look stuff up in the dictionary with it. You can chat with it online.
When Pinyin is not great, though, is when it takes the spotlight away from characters, such as on a page students are supposed to be reading.
During the year of Russian class I took in college (peer pressure; all my friends were Russian minors and there I was with just Chinese!) we had a wonderful teacher who always strictly enforced his “no English letters near the Russian words” rule. His advice was to footnote and write any notes at the bottom of the page, so that the text would remain clean for re-reading.
The native-English-reading eye just can’t help itself; if there are letters around that look familiar, it’s going to read those before trying to tackle unfamiliar signs and symbols. I realize it may be overly optimistic to hope that students re-read passages they get in class (!), but even apart from the notes students write in to help themselves, many texts actually print the Pinyin on top of the characters. I just shake my head and wonder what they were thinking.
Pinyin is a great tool, and it should be available and used wisely. But it needs to be kept secondary. That’s why I chose to take the time to insert the Pinyin pages (kept the same length as the text in characters) after each corresponding page in my Chinese version of Anna Mei You Banfa! (a Chinese language adaptation of Blaine Ray’s TPRS novel Pobre Ana). This way, students can easily find the Pinyin that goes with any character they do not know, but they have to turn the page to do it. It’s not right there in front of their eyes saying “Look at me instead of using context! Just read me, don’t bother to guess or use reading strategies!”
(Shameless plug: Anna is available on Amazon.com: just search the title. It’s a simple novel all in Chinese intended for first-year readers of Chinese. My first-year students should be able to manage it by around March.)