The biggest downside I've seen so far is the very primitive database support; there are arbitrary restrictions that make the GUI management of the database schema very prohibitive and counter-productive. Simple things like renaming columns and deleting colums with relations or adding columns with non-nullability is often not possible.
There's a Visual Studio extension called SQL Server Compact Toolbox. This extension allows you to connect to SQL Server Compact 3.5 or 4.0 database files from VS2010. You can generate and run CREATE and DROP scripts as well as run SELECT, UPDATE, and DELETE statements. AFAIK, there is no visual table designer. You'd still have to use the one in WebMatrix, but if you wanted generate the entire schema from a script, you can run the script through the SSCT in Visual Studio instead of having to design the tables manually with the WebMatrix table designer.