The big advantage of the cookie cutter method is the generally automatic way it creates smooth grades and transitions to grades by bending the plywood. In the bad old days, folks would often create grades and elevated track by building a ramp on top of their table (I helped my father do this on his first HO layout). Grade transitions were non-existent, and performance was poor as the train hit this sudden change in grade.
Cookie cutter let a modeler start with a simple, flat-top table and then introduce grades and elevations when he/she was ready. The advent of inexpensive jig saws in the 1960s made this practical. Yes, there is wastage. But the cutout sections were commonly used for scenery bases, such as harbors and lakes (at least that's what I did). The "waste" also helped reduce weight of the layout.
The expense of cookie cutting (as you pointed out) generally limited its use to to table-top layouts 6ft x 10ft and smaller - typically 4x8. Anything bigger was built open grid from the start with just strips - usually plywood - for the subroadbed or used the spline method.
Interesting that foam has taken us full circle to flat table-tops again. And ramps and risers are put on top of the table top to produce grades and elevations.

Yes, foam has the ability to carve out scenery features below track grade level. But how many do that throughout their layout? How many foam layouts are flat with no scenery below track level except the one place that a bridge or trestle is put?
But I'm not sure I'm ready to go back to the extra weight of plaster on screen scenery (or other plaster scenery base), either.
My layouts must stay movable because I ain't stopped moving yet! My old style layout was quite "thick" - about 15 inches from bottom of frame with legs removed to top of plaster mountain - and heavy. So the next layout I'm going to try cookie cutting a 1/4 inch plywood and 1 inch foam combination to see if that will bend to smooth 6-7% grades and not sag between supports (16 inch spacing) in the long term. The other alternative is to carve the grades and scenery into 6 inches of foam - not sure I'm ready for that. I do like the idea of foam for a scenery base, but I think it's way too easy to end up with too much flat terrain. I'll have to be careful there.
yours in layout construction