Tags and categories are two different grouping options in the blog - if you look, you'll see that I'm using both (and using the built-in tag functionality for tags).

That said, I believe that categories as nodes have more power when it comes to customization. For example, someone may want to attach a template to categories so that they have friendlier URLs when browsing by category, and someone else may want to add properties to the category nodes that will, for example, differentiate some categories from others. Possibilities are endless - but with tags, they are very finite. That's why I never use tags for categorization unless it's requested.

Hope I covered you :)