Oracle 11g connect overhead
The problem is the locking in the SGA that effectively cause the the concurrency is going down. This kind of apps make the database a close to single user platform instead of a highly scalable and concurrent accessible database. The cause of this is that the connections have to be maintained in a shared memory table where inserting and deleting means locking and causes serialization. There is a nice video series about this kind of real world performance problems connection pooling Implementing connection pooling in the demo app in the video causes a 10 fold performance upgrade ...

The spawning of the processes does cause a little overhead but that is handled well by the OS.

Next to that, the listener log wil grow quickly, causing every next connection to be slower than the previous one.

If session auditing is enabled - a default - the sys.aud$ table will explode and make your system tablespace grow very rapidly. I see many databases where this is the cause of an enormous system tablespace and sometimes even bigger than the rest of the database, because of this connection problem.