I agree with the basic premise that cut-scenes aren't in and of themselves a bad thing, and that it's perfectly reasonable to use them for many of the purposes Jim describes (downtime, pacing, reward, story exposition, etc.)
However, the matter of taking control away from the player leads to one of my pet peeves.
It's okay, in my mind, if the cut scene takes away the player's control to do what they would have done anyway, to do things that are in character for the player's character, to advance plot through characters who aren't under the player's control, and so on.
But please, for the love of all that's good and holy, don't take away my control to have my character do something stupid, and then bring me back to deal with the resulting clusterf@#$%. Don't have me "ambushed" and "captured" by three of the mooks I've been turning into fine mince by the hundreds for the last hour. Don't set me up as a nigh-invincible amoral killing machine in-game, and then have me fail to kill someone I actually have reason to kill because it might interrupt their monologue (while they, incidentally, prepare their escape pod for launch.) Don't have me clearly and handily winning a fight, and then have the bad guy win anyway in the cinematic.
There are ways to get the plot where the designers need it to go without abruptly turning the player into a marionette. I recognize that there are games that force players into these kinds of situations even without using cut scenes, but they are the area where, to my mind, cut scenes are used most often not as a tool or a device, but as a crutch. And that, I wish would stop.