There are very good reasons for using them, especially in smaller spaces.
When visiting Europe, it seems that almost every toilet you see is an in-wall style with two buttons on the wall and a wall-hung toilet bowl. It's essentially the standard; I asked Ben Adam-Smith why he put one in his Passivhaus and that's what he said: It's standard, everybody does it.
When I divided my house into two units, I didn't put a bathroom on the third floor at the time, and recently decided to add one. Space was tight, and the single biggest benefit of in-wall toilet designs is that they save a lot of space, about nine inches of depth and a bit of width too.Another benefit is that they are much easier to keep clean; the bowl is wall-hung so it is easy to clean the floor, and there is about half as much porcelain.
The main downside to these toilets is that they are expensive to buy; ours is from two suppliers, Geberit for the in-wall stuff and Toto for the bowl. They are also more expensive to install. I always thought that maintenance was an issue, given that you can't just lift off the lid to get at the ball cock or float, but these are designed so that you can reach it all through that panel with the buttons.
Here you can see the Geberit unit mounted in the 2x6 framing of the new wall enclosing the bathroom built by Greening Homes.
Another benefit, for those who want a higher toilet, is that those feet are height adjustable, although you can't change your mind once it is framed into the wall.
In Europe almost everyone uses a nominal 6" deep unit connected to a 4" drain, but they developed a shallower 4" unit for a 3" drain that is standard in North America. Even though it ate up two inches, I went for the 6" wall because there is a lot of leverage action when sitting on that toilet and I thought the 6" unit would be stronger and more stable. However, they are both rated for 880 pounds of load.
These are not that common in North America and installing it was a bit of a learning experience; the plumber read 15 warnings telling him DO NOT OVERTIGHTEN so he didn't; on the first use the toilet was flexing, opening the drywall on top and pushing it in at the bottom. I was certain we were going to have to take the whole wall apart and add blocking. It turns out that you have to use a torque wrench and get it just right – tight enough to hold the bowl in the right place, not too tight to crack the porcelain.
Now that it is almost finished we can ask, was it worth it? There is no question that it is a much cleaner look in a very small space. Given the cost of real estate and building, in new construction one could make the case that the space saved is worth a lot more than the extra cost of the toilet. The dual-flush buttons are bigger and more obvious, and it is much quieter.
In Europe, almost everyone uses these; after putting one in, I wonder why North Americans are willing to have big clunky toilets bolted to the floor with all kinds of gunk-catching exposed parts. This makes so much more sense.