What are some of the key drawbacks with S-curve analysis?

The cause of S-curve drawbacks lies mainly in its lack of tying the schedule and budget to actual project progress.  

•  S-curves give little indication as to the cause of variations from projections.   
• The S-curve simply points out deviation of cost in relation to time.  It does not relation task completion to time or cost.  Therefore, when a deviation is discovered it is unknown whether the project is on target so far as physical progress (whether work is being completed on, ahead or behind the anticipated time and budget).   
• Without knowing the cause of the variance, managers may make incorrect assumptions about the status of the project.