andybot is spot on. Our current licensing system in VfS is a pretty big headache in certain situations. Some big companies have some very complicated security setups that prevent them from being able to license via the web, so then we have to juggle offline activation files around, and that gets messy. If you make any hardware changes to your computer, our current licensing will throw a hissy fit and tell you that you don't have a valid license anymore. Transporting a license from one machine to another is a grueling process.... the list goes on. Then on the positive side... you can activate for the first time, as soon as you purchase your license, and there's no extra hardware that you have to connect to a computer. That's about it though.
On the other hand, dongles allow us to still provide floating licenses, so you can have one dongle with 50 seats on it, and serve out those licenses to your whole office, just like the web based licensing allows. They allow you to move from one machine to another without a hitch. They allow you to modify your computer, or reinstall your OS without a problem. You don't have to worry about keeping track of that every so crucial email that has your serial number, like you do with the web based activation. Also, the dongle based licensing runs as a service without a problem from what I've heard.
I'll admit, I wasn't very excited about switching to dongles at first. I was not very fond of the idea of giving up a usb port. When my old development laptop died and I had to get a new one, I saw the value. I was up and running immediately, and I didn't even have to play around with our licensing database! Hooray! When I think of how many emails we get every week, from users that experience a similar situation, and now need us to add an exception to their license so they can re-activate on their machine that they modified in some way to invalidate their old license... I can really see the value. We typically will handle licensing related issues within 24 hours, but instantaneous is much faster!
Anyway, I can see both sides now. It's nice to be able to immediately activate your product, without having to wait a day or two for something in the mail. It's also nice to not have to wait up to 24 hours to use the product that was working fine yesterday, because your IT department modified your computer's hardware. When I really weigh it out though, I think I like the dongle based licensing much more (I never thought those words would come out of my mouth... or keyboard).