On one hand, they're nice in that the exact value of your "points" is known and guaranteed.

On the other hand, the conversion often isn't that great, typically 1-3%. Meanwhile, earning rewards in "points" or "miles" can return value in the 5-10% range if you're savvy enough. The savings can be worth it, but some might just use a cash card out of principle (refusing to allow the card issuer to dictate how points are used) or laziness (Just don't feel like optimizing the return).

For me, I use a cash card out of laziness.

You can get more if you are willing to deal with the points. For example, Chase will give you 3 points per dollar on some cards on some categories, and Amex will give you 4. Those points can be >$0.01 each transferring to airline miles (or in the case of Chase $0.015 "paying yourself back" for restaurants). No card will give you 4.5% cash back on restaurants.

Regularly converting some credit card points is a good idea if you need the cash and it's a terrible system when they don't let you convert for cash. I consider any card that doesn't value points at 1:1 cent as junk.

But if you can use them within the system it's almost always a better deal. When used for airlines there's a large percentage increase in their value when buying tickets. When booking a hotel the cash price can sometimes be twice as much as the points price when I transfer credit card points in for example. Chase offers pay yourself back which increases their value on purchases in certain categories, although the categories haven't been all that great lately.

I used to convert nearly all my points to cash immediately but now I sit on enough for a small vacation before considering changing them out.

Definitely a more flexible option, but you might trade overall value for that flexibility (in the sense that you can frequently use accrued points for more value than the cash).