I think it really depends on the show and the production. It seems to me that the whole "band on stage" trend started with the transfer of Chicago from Encores to Broadway. (yes, I realize this is not the first show that utilized this setup, but it's one of the first of the current trend, that and Rent, but I'll get to that later) The reason for this setup was mostly because that's the way it was staged at Encores and bands are always on stage for Encores. The show incorporates the band as much as possible, an entrance in the middle of the band, Amos waving his hand in front of the conductor to no effect. But the show is minimal and it works.
The same is true with the current production of Hair. The band was on the stage in the park because...well...there's no orchestra pit in the park. And the band is more or less incorporated into the scenery of the stage and is also used in certain numbers, such as when Hubert plays the piano during "my conviction." Rock of Ages is about a guy who wants to be a musician and works in a rock club ala CBGB or Cafe Wha? It wouldn't make sense not to have the band on stage.
Sometimes an orchestra is on stage due to space constraints but hidden, as was the case with She Loves Me from many years ago.
With the smaller ensembles composing orchestras now it is much more feasible to have onstage ensembles, whether they interact with the characters or not. Big shows like Les Mis or Phantom could NEVER work with an onstage orchestra. Spring Awakening I don't think could have worked with a pit orchestra. Half the idea of the show is to have everybody onstage at all times (except when their character dies) and I'd think that includes the band. Not to mention, putting the band under the stage would probably mute the edginess of the sound that resonates the theme of bitch of living. Most (not all, don't ping me on that) rock operas, now that I think about it have their bands on stage for that exact reason.
Sometimes, even if the band is in a pit, the conductor is still a part of the show and interacts with the cast, like in Curtains.
I don't know if the musicians like it. They have to be around for all the numbers and the show itself and can't take breaks or eat snacks, which was the case when they're unseen-and this I know from both experience and stories from my band directors. The aforementioned actions would be too distracting for audience members.
In the end, the choice of the band on stage has to come from the director and what kind of look and feel they want to purvey for the audience. If they want to make it more realistic, they hide the band, like in In the Heights. If the story revolves around musicians, they show the band in order to convey the message of music, like Rent or Rock of Ages. If the show is minimalist and/or avant garde, they also show the band to keep the audience from forgetting that they're watching a play.
So, in conclusion, I don't have a take on the band on stage until I see the show in question. It is then I can give my full critique. Personally, I miss the sounds of fully orchestrated pit orchestras but the fact is most musicals aren't arranged for pit orchestras anymore and to me that's sad.
Waiting for tickets to Hair August 2008