Why does LEGO now use studless technic designs?
The studless have SEVERAL advantages over the studded design especially when you want to include moving parts. Just the clearances between connections is important. Sariel sums it up in his book well. He says there are advantages to both systems (stud-full, for example, are more rigid) but the fact that the stud-less look more realistic and, of course, the clearances, make a huge difference. I think the change was NECESSARY to build more realistic models (realistic looking, arguably, but the new models are very mechanically clever in ways that would be impossible with the stud-full parts).

According to Jamie Berard, these advantages were a major part of the gradual migration, as was a flaw in the studded beam design-- the holes in studded technic bricks are placed slightly incorrectly according to the LEGO "System". That means for technic model designers, working with studded beams (and staying "In System") provides many difficult challenges.