A down-side of space for grouping is that it uses up screen real-estate and can result in the need to scroll more. Scrolling not only takes up user time, but makes it hard to compare information on the screen, because two or more units of data may not be able to be on the screen at the same time.

For example, if you are entering employee info, and you get to the "dependents" section, you may want to know if the dependents have the same last name as the employee as a quick check of applicability. If the employee name is at the top, then it may have scrolled off the screen by the time you get to the dependents entry. In a more compact design, it's more likely both will be on the screen at the same time.