It causes problems when you use a different variation of whitespace than the next person. Say you write this (psedo-Python):

if mumble
\tfoo
[download]

Say the next programmer has their editor set to show tabs as 4 spaces, and uses 4 literal spaces for each indent. They add:

if mumble
\tfoo
    bar
[download]

Oops! Now a new block has started. This will almost certainly cause a problem at some point, and it will be very difficult to see exactly what the problem is (whitespace problems are like that).

Good solution: Have coding standards that force all members of your team to have consistent indent settings. Better solution: Don't have your langauge use whitespace for anything more than tokenizing. Preferably not even that, if you can get away with it.

In any case, I think this is mostly an annoyance, and it does not stop me from using Python or Ruby.