Aaronw brings up a number of interesting points, some of which I agree with. [Later edit: so does jgonzales, who apparently was typing his reponse at the same time I was typing this one. Very nice to see you in the Forum again, Mr. Gonzales!] Several others are, I think, very much worthy of discussion.
To begin with, some people contend that the only "legitimate" way to build a model is from scratch. I respect that view, but I don't happen to hold it myself. I think kits and manufactured parts have a valuable role to play in modeling. If we acknowledge that premise, the next question is what material is best for reproducing an object in kit form.
The notion that "wood is the best material to represent wood" is reasonable - up to a point. Serious scale ship modelers learn quickly that most commonly available woods don't do a particularly good job of representing wood in miniature, because the grain doesn't get reduced to scale. (The HECEPOB companies, for instance, are fond of mahogany. The grain of a typical piece of mahogany is such that a 1/100-scale sailor would trip over it.) Basswood has a reasonably fine grain that works pretty well as a small-scale reproduction of wood, but it has other drawbacks. Experienced scratchbuilders find themselves gravitating toward woods like box, pear, and holly, which are too expensive for the model companies to use. Some of the plastic kit manufacturers' efforts at reproducing wood grain have, admittedly, been pretty funny. But styrene parts, if designed by people who really know what they're doing, and painted by modelers who know what they're doing (remember that many wood parts of a real ship are painted), actually can do at least as good a job of representing wood to scale as almost any wood can - for a lower price and with considerably less effort on the part of the modeler.
People who are new to sailing ships aren't aware, I'm afraid, of just how complex the construction of a real wood ship's hull is. Reproducing it in the form of a single block of wood is, if anything, less realistic than reproducing it in plastic. The vast majority of "plank-on-frame" wood kits (all but a few of which are better described as "plank-on-bulkhead") only offer an approximation of the appearance of a real ship's planking. The plastic kit manufacturers, if they know what they're doing (that's a mighty big "if"), can actually do a better job of reproducing that appearance than most of the wood kit manufacturers even attempt.
Example: the various H.M.S. Victory kits. The Model Expo catalog contains at least half a dozen versions by continental European manufacturers. I haven't looked at all of them personally, but I'll stick my neck out and assert that, the advertisements not withstanding, none of those kits makes a serious attempt at reproducing the ship's hull planking accurately. (One of them, the supposedly 1/90-scale version from Mamoli, claims to be "so accurately detailed that your model will have the same number of hull timbers as the original." That's an outright, bald-faced lie.) The real ship's main wales (the belts of extra-thick planking surrounding the hull near the waterline) were originally planked in the "anchor-stock" pattern, each plank being five-sided. None of those continental wood kits reproduces the anchor-stock planking. (Nowadays, neither does the real ship. At some time or other the planking of her wales got replaced by cheaper, four-sided boards. Money, unfortunately, plays a big role in historic ship preservation.) I haven't seen the excellent Calder/Jotika 1/72 Victory (which, in the U.S., costs more than $1,000), but on the basis of photos and reviews I'm pretty sure it doesn't have anchor-stock wale planking either. Now take a close look at the 1/100 Heller plastic kit. The countersunk lines between the planks may be a bit too wide and too deep, but they show every detail of the planking - including the anchor-stock-planked wales - correctly. Planking the hull of a ship-of-the-line on 1/100 scale to that standard would take a real expert, with a good deal of experience, a great deal of time. The plastic kit offers the average modeler the opportunity to build a Victory with accurate hull planks (to say nothing of the copper sheathing below the waterline) in a reasonable amount of time.
Many of the components of a wood ship are, of course, not made of wood - and it's those parts that, in some cases at least, lend themselves particularly well to reproduction in styrene. Others don't. Plastic is a wretched material for pieces like belaying pins, hammock netting stanchions, and eyebolts. But it's an excellent material for modeling such things as gun barrels, windlasses, and various rigging fittings and pieces of deck furniture. Again, a comparison between plastic and wood kits is instructive. As I understand it, every one of the wood Victory kits - including even the Calder/Jotika one - represents the guns on the two lower decks, if it represents them at all, with "dummies" (stub reproductions of the outer ends of the barrels that plug into holes drilled in pieces of wood inside the hull). The famous scratchbuilt model of the Victory by C. Nepean Longridge, which has been an inspiration to several generations of ship modelers, has all its lower- and middle-deck gunport lids closed; there are no guns in there. The Heller kit, on the other hand, represents every individual gun with a complete, multi-part, full-length barrel and carriage.
Another example. Dr. Longridge, in his book, The Anatomy of Nelson's Ships, acknowledges that the lanterns on the stern of the Victory defeated him. He had somebody else make a set of masters for the lanterns on his 1/48-scale model, and had them cast in silver. He then oxidized them, so they're solid, black, opaque castings. The lanterns of the Heller kit are cast in clear plastic; the modeler paints the frames to match the original. Which is more accurate - Longridge or Heller? And how much philosophical difference is there between using a part produced by a manufacturer and one made by an individual other than yourself? (Longridge also "farmed out" the carving of his model's figurehead and the decorative devices on the breeches of its guns. I've never heard anybody denigrate him or his model for that.)
Another big virtue of the plastic molding process is that it can reproduce parts that simply are too complex to be made by the average - or far-above-average - modeler. There's plenty of room for criticism of the old Heller sailing warship kits, and I've probably voiced most of those criticisms myself at least once. But such kits as the Heller Soleil Royal, the Airfix Wasa, and the big Revell Constitution demonstrate that, if the masters for a plastic kit are made by skilled artisans, they can reach a level of historical accuracy and artistic subtlety that's beyond the realm of all but a few individual modelers. The aforementioned Heller kit has serious accuracy problems (a Forum search on the words "Soleil Royal" will produce some excruciatingly lengthy arguments about them), but the carvings on its bow and stern rival those of all but the finest of the famous English "Board Room" models. That's as high a compliment as I know how to pay. The HECEPOB companies, with their "bronzed metal decorations," have never come close to that standard. (Caveat: Calder/Jotika and the Amati "Victory Models" range of kits, which, as I understand it, are designed by a gentleman who used to work for Calder/Jotika, may represent a breakthrough for the wood kit companies. I believe their "carvings" are cast in resin. The forthcoming Victory Models H.M.S. Prince may represent a huge leap forward for the wood ship kit industry. But it sure has been "forthcoming" for a long time - and heaven only knows how much it will cost when it finally gets here.)
A key to the enormous potential of the plastic kit is the pantograph machine. (Maybe that term is obsolete in the computer age. If so, the manufacturers have made it clear that modern technology is even better.) Take a close look at some of the details on even the oldest of the Revell sailing ship kits. The crew figures on the old Revell H.M.S. Bounty (vintage 1956) achieve a level of detail that can compete with the very finest parts in the most recent kits from Japan or China. (Captain Bligh, who's less than 5/8" tall, has upper and lower lips, and buckles on his shoes.) I'd challenge any individual modeler to beat that standard. The plastic molding process has the potential to reproduce finer detail than any modeler can achieve by hand. If you don't believe it, take a close look at an old LP phonograph record.
Aaronw makes an excellent point about prices. Frankly I suspect many of the wood ship kits on the market are priced higher than they need to be; that's another argument. I think one reason for the near-demise of the plastic sailing ship kit is that the delicate balance between the number of people interested in the hobby, the number of people who have (or realize that they have) the skills to build sailing ship models, the amount of time it takes to build such a model, and the costs of producing the kits just doesn't work out right. I'm a big believer in plastic sailing ship kits. These days I don't buy many kits of any sort, though; they're just too expensive. A $50 purchase is not an "impulse buy" for me - and I suspect it isn't for many other people. (That's an important consideration for the manufacturers and distributers. Anybody who's ever worked at any level of the hobby industry knows that if the only kits - plastic, wood, ship, aircraft, or whatever - that ever got sold were the ones that got built, the industry would quickly go broke.) As I mentioned earlier in this thread, one of the paradoxes of the hobby business is that as a modeler gets better, he/she tends to spend less money. (Partial exceptions: radio control modeling and model railroading.) The "ideal," multi-media sailing kit that we've been discussing in this thread probably would cost well over $100. In practical terms, that means a person like me (i.e., a part-time amateur building models in the evenings and on weekends) might - might - be able to build one or two such kits per year. I don't know how many people like me it would take to keep a manufacturer of such kits in business, but if I were a potential manufacturer I'd probably conclude that there were better ways to invest my money.
My own personal opinion, for what little it's worth, is that there's a place for scale ship model kits that make skillful, intelligent use of many materials and media - and the material out of which the original was made ought to be only one consideration in picking them. (We don't insist that the only "legitimate" material for a model of an airplane or a car, or, for that matter, a modern warship, is metal.) In my opinion wood, styrene, resin, cast metal, and photo-etched metal all have excellent potential applications in ship modeling.
I'd like to see a wide range of multi-media ship model kits, in which every part was reproduced in a material intelligently chosen as being best suited to reproducing it. Reality forces me to admit that the day of such kits probably won't arrive in my lifetime - if ever. And if they ever do become available, I probably won't be able to afford them. But it's not a bad idea to keep that ideal kit in the back of one's mind.