There's 3-in-1s and then there's 3-in-1s. Some are pretty small and flimsy, but I think the 9729 style is one of the better ones around. I don't think even the critics have a problem with the lathe portion, per se. It's comparable to any Chinese lathe of similar size. There are two main criticisms, the first being the need of swapping set-ups when switching from milling to drilling.
To a degree, this is warranted. If I have something on the lathe, I can't readily set up something else for milling or drilling. I find this primarily happens when I have a project I am pecking away at in my spare time, but need to use the machine for something more urgent in the meantime. I can sometimes go the other way -- use the lathe for a quick job without disturbing the mill set up too much by mounting the tool post further to the end of the table than usual. It depends on how much of the table is already in use for the milling project.
Interruptions aside, changing from one job to another generally involves a new set-up on any machine so that particular characteristic is not that much of an impediment otherwise. I can often plan the job so all lathe work is done at one time and all mill work done at a separate time. I'll even do multiple projects simultaneously that way. For example, when I made some gears, I turned the blanks for the gears and the gear cutter etc. all at the same time, then set up to mill -- first the cutter, then the gears using the cutter.
The other complaint is that the mill/drill moves when the head is raised or lowered due to the round column. This is common to any round-column mill-drill, not just 3-in-1 machines. There are ways around this, it just takes some time and care to re-index and some forethought to ensure you have something to index to before and after raising/lowering the column. Many 3-in-1 designs have a fair bit of space between the table and the spindle, even when the column is fully lowered. There is a temptation to rely on the quill as there is no movable knee, but accuracy suffers at full quill extension. It is better to use a riser block to lift the work or a different tool holder to lower the tool rather than fully extend the quill when milling. BTW: When considering the practical limitations of the other two dimensions, remember that while the cross-slide travel may be, say, 8-1/2", you have to leave some room for the diameter of the tool at either end.
Size-wise, the 3-in-1 format has the obvious advantage of a smaller footprint than two separate machines of the same individual capability. This was a huge consideration in my case, where I could only spare a small corner of the garage. Separate machines would have meant much smaller machines, so in my particular case, the "small-envelope" of the 3-in-1 is actually larger than I could achieve with separate machines.
Cost-wise, the 3-in-1 can have an advantage too. The lathe uses the milling table to support the tool post, there's only one bed to build, a single 3-axis DRO does double duty (with a quick setting change from Radius to Diameter mode on the cross slide, of course) and the lathe motor can be a power-feed for milling (on machines with separate motors anyway). A side-effect of mounting the lathe tool post on a milling table is that there's room to have two tool posts set up at the same time -- handy for making a series of ball-ends or whatever. (And if you are doing small stuff, you can have a milling vice at one end of the table and a tool post on the other -- so much for the "have to change set-ups" criticism
So if space and money are no object, time is critical and/or you will regularly mill across more than 6-8" in each direction or deeper than 4", then the 3-in-1 format is probably not for you. But I have turned out some quite usable pieces over the last 1-1/2 years so if the versatile format "fits" you and your needs, don't be afraid just because some others decided a 3-in-1 didn't fit them.