-More CPU time required
irrelevant, many game especially shooters use PSG with a lot of scrolling and sprite + BGM music with sometime PCM sounds.
-More work required to get sound effects working; music channels have to be cut temporarily to allow sound effects to play
More work to develop sound engine OK. Channels cut it's not a problem with 6 channels + IFU's PCM. Don't forget that the limitations is a part of the chiptune feeling. If you make a retro game on real hardware push the trip to the bitter end.
-More space in RAM required that could be better-used for other things
Hey, I feel here not be honest with yourself. Which System Card Henshin Engine uses ? The System card 3.0 I suppose. There is 2 Megabits of RAM in there + internal RAM, this is not enough to put few kilobyte of sound code ?
These are all important details when using HuC, of which Henshin Engine's code is about 90% (about 10% assembly). On top of that, the overwhelming majority of CD-based games back in the heyday of the PCE used Redbook audio.
The overwhelming majority of CD-based games used redbook only because it's new and surprising at this time compare to chip music + easier to develop than coding music on metal.
Also, "nowadays" is irrelevant; we are still using the same technology as they used "back then"... it's not like the PCE has been upgraded. 
You don't understand, it's not tech speaking but historical context speaking. At this time, the majority of music was hardware produced with electronic feeling with beep and blop. When a sound designer chose to put BGM using redbook he uses "real" instruments to make the diference versus "primitive" chiptune. This is a step forward for the gamers side "the music is more realistic" and they understand advantage of audio CD VS chip music.
But nowadays there is no advantage for using CD VS chip music and the fake progress of redbook in video game became irrelevant.
And today, you put chiptune on redbook whereas at the time, nobody would have thought to put chip music on redbook. Because chip music is produced by a chip and "real" music is recorded on redbook. There is a nonsense here no ?
To me, Redbook audio is what captures the true feel of a Turbo/PC Engine CDROM game, as you were getting only chiptune music from every other game console you owned growing up in that era like NES, SNES, N64, Genesis, etc. all the portables, etc.
Redbook has no feeling. Is just a medium. And if you want the true feeling of PC-ENgine CD you must record some 90' synth, not chiptune.
With more than half the games on CD (most of which using at least some redbook tracks if not all), it's stupid to say redbook is 'fake'. Good music is good music, regardless of whether it's chip generated or not.
Yes your right, good music is good music regardless of whether it produce. But I prefer a singer in live compared to a guy who sings in playback. Redbook is playback and does not use all PC-Engine hardware.