I've done this plenty of times, but you can anonymize the data fairly easily and get the benefits of both.
The flip side of the coin is dev databases not being representative of production, this can cause performance issues. "It works with 10 rows on localhost, why doesn't it work with a million in production?".
The flip side of the coin is dev databases not being representative of production, this can cause performance issues. "It works with 10 rows on localhost, why doesn't it work with a million in production?".