Hayao Miyazaki--creator of Spirited Away and Howl's Moving Castle which are two of my favorite animated films--in a recent interview about his new hit Ponyo on the Cliff by the Sea explains why he favors the traditional pencil over computers:
I think animation is something that needs the pencil, needs man's drawing hand, and that is why I decided to do this work in this way. Currently computer graphics are of course used a great deal and, as I've said before, this use can at times be excessive. I will continue to use my pencil as long as I can.
Not to argue with a master, but Pixar has demonstrably proven that animation doesn't need the pencil, but Miyazaki's drawings are unquestionably infused with something magical that no computer could produce on its own. Tools aside, Pixar and Miyazaki share a commonality in that what makes their films so successful is ultimately great and compelling stories for all ages.
[Thanks Moye!]