I've had two Toyotas with the 3.4 (T100 and Tacoma S-Runner) and two Toyotas with 4 cylinder motors (4-Runner with 22RE and Tacoma with 2.7).

Comparing my T100 with the 3.4 and 5spd to my Tacoma with the 2.7 and 5spd is like DAY and NIGHT. Having owned both the 3.4 and 2.7 in 5spd, I would never suggest the 2.7 comes close to running with a 3.4. The 3.4 is an awesome motor for a small truck, fun to drive hard, powerful enough for light truck duties, good on gas, and reliable. However, I purposefully bought my '03 Tacoma with the 2.7 instead of the 3.4, because to me...classic Toyota "fun" and reliability means having a 4 banger under the hood. From what I understand, the 2.7 is a stout motor, like the 22r motors are, though I do have a buddy with this new-to-the-block low end knock in his 2.7. The 3.4 on the other hand, is also a great motor and probably has far less problems than the competition's motors.

So, I would say people buy the 2.7 for three reasons
1) they can't afford the 3.4 at buying time
2) they don't know or care any better
3) they wan't "classic" toyota

The 2.7 does quite well for what it is. I run 33" tires with stock 4.30 gears and have pulled 3000 pounds up steep grades several times. Granted, its in 3rd or 4th gear while my T100 would've hardly broken a sweat.....but, the motor does pretty good.

Reliability wise, it probably isn't an issue, but I am crossing my fingers that sticking with the 2.7 will save me some grief at some point.