Personally, I'll have to agree with Astinus about the fact that it doesn't give time for readers to take in your fic and leave a review. If you've prewritten your fic and already proofread it in advance before deciding to post your installments, I really don't see any sort of problem in terms of quality, as it's the people who don't that tend to violate every code of common sense and writing that they can possibly get their hands on, if that makes sense.
However, there is a big problem, especially if you have a lot of chapters to be posting. Basically, regardless of the reviewer, think of it like this: the more you have, the less willing new readers will be in getting into the fic. That is, if you have six chapters, each ten pages long, new readers will be reluctant to tackle your fic because it will take them longer to catch up and leave a review. If you have one chapter of ten pages, however, it's not so much of a problem because that's far less intimidating. I know a lot of people who, when I started posting the revision of my Infamous Giant Pet Fic, told me that they didn't want to review the earlier version because I was already up to chapter six, I tend to write long chapters, and they didn't feel right just jumping in and trying to catch up when I'd probably be doubling that chapter count by the time they're done.
In other words, it's just more intimidating if you post a lot of writing in a very short amount of time, which is really the reason why, if you prewrite a fic, you should give it a few days before posting the next part if you want a decent number of readers.
Of course, if you're sitting there and actually pushing out one chapter in the space of an hour or two, then yes, you'll want to slow it up. I once heard a long time ago -- and still think it's true -- that you'll need to let your fic cool for at least twenty-four hours before proceeding to the proofreading stage so you can see your own work with less of a writer's bias (which you would have more of if you've just finished your work).
