Some editors have complained against the use of <math>...</math> for formulas embedded in running text. They do have a point: Wikipedia is about contents, not looks, so one should not waste time with edits that only improve the looks without adding contents or at least improving readability.
Indeed, the <math> mode should not be used for things like "3×3". It is also hardly justified in an article that has only a few formulas embedded in the text, with no displayed formulas.
On the other hand, the letters that one gets with ''f''(''x'') = f(x) and <math>f(x)</math> = are sufficiently different to have an impact on readability. If the article contains displayed formulas (for which <math> is a must), some readers may wonder whether that f in the text is the same in the display. Especially if the reader has chosen a skin that uses a sans-serif font for text.
Moreover, for formulas that use two or three variables the math notation is actually shorter, and much easier to type and edit: compare ''f''(''x''+''g''(''y''<sup>''k''</sup>)) with <math>f(x,g(y^k))</math>. The TeX "\alpha" may be longer than "''α''", but is actually easier to enter if you do not have a Greek keyboard; and even complete novices will immediately figure out how to edit it. To the extent that Wikipedia must be easy to edit, rather than pretty to look at, this consideration alone argues for making <math> the stadard way of entering formulas, even in text.
Recently people have started to use new templates like {{math|...}} and {{mvar|...}} in wiki-hacked math formulas. That is the wrong way to go: it makes wikisource even more cryptic and hard to edit, and does not improve looks. One still has to use '' and <sup>...</sup> in those macros; but one cannot use "=" in the formula (!) otherwise one gets a totally unhelpful error message.
The main objection to <math> is that it fills the page with little PNG images that are often of the wrong size compared to the text. That problem is being solved systemically as Wikipedia is moving to use MathJAX/SVG instead of PNG rendering for formulas. (If you haven't tried, try setting that option in your Wikipedia profile, at the bottom of the "Appearance" page.)
Finally, TeX notation is known to millions of people out there, whereas wikisource templates and tricks are known only to regular editors (which have been dwindling since 2006, and must be less than 5000 by now).
Tex/<math> is less likely to scare novice editors away; and this should be the overriding concern of the Foundation at this time. (Yes, even above fundraising: because editors who succeeded in contributing contents are more likely to donate than would-be editors who were scared away by the wikisource mess, or old editors who left because they got tired of maintaining that mess.)