The major disadvantage is the thing that also cuts down the competition, buying foreclosures takes a lot of time. You will have to look at many properties in order to find a home that is right for your needs.
Once you find something, your competition comes not just from the other buyers, but from the owners as well. At the last possible moment, they might file for bankruptcy, work something out with the lender, or borrow the money needed from a relative. Then, you would have to start all over, looking for another property.
One important disadvantage is psychological. If your strategy is to search out preforeclosures, or to shop at foreclosure auctions, your sympathy for the owner might cloud your judgment.
You will either feel guilty and abandon the strategy, or you will pay too much for the property. You have to remember that this is a business. You can behave ethically and fairly, but that does not mean losing sight of your own interests.
People who are able to walk that line will be able to continue. Those who cannot should switch to buying properties after the foreclosure, when things are more impersonal.