Paul;
You state:
There are substantial disadvantages, too.
In order to take advantage of the greater
port-density(-per-dollar) on FR switches right now, the
end user has to use FR, which is not always practical
or desirable.
One of the reasons why end users find frame-relay undesireable is
that they cannot be assured that their provider is not grossly
oversubscribed on PVC-per-port density. When you buy a T1 private
line, you can be assured that you're not sharing it with 120 other
end-users. 
DS3/DS1 Backbone/Trunk capacity planning principles, whether across a Frame Relay Backbone or Cisco 7000 hdlc trunk network are still the same. It's just as easy to over configure DS3/DS1 Cisco HDLC trunks as Frame Relay trunks.
Potentially at issue here is not Frame Relay networks as a transport but that a Cisco 7000 can not scale properly to support 120+ end-users.
Modern Frame Relay switches:
1) have sub-msec latency
2) can support multiple trunks at DS3+ (to include ATM)
3) are not burdened with processing any of the IP layer 3 nor routing overhead
4) because of 3 have a cost per port that is 300 to 400% less than a Cisco 7000
5) can have it's backbone shared across multiple services thereby reducing both capitalization and bandwidth expense
6) allow ISP to pass the cost savings on to customers