Depending on the actual command, this can be far slower and less efficient than xargs. You're creating a separate process for each invocation of bar when a lot of commands will take many targets for a single invocation.
Try this with find and grep vs xargs. There's a big difference.
3 reasons against that:
* in a lot of cases the performance just doesn't matter
* xargs gets you the spaces in filenames landmine
* some commands don't even support multiple target filename arguments
For scripts in long term use, yeah, sure, figure out xargs maybe. Any other situation with a "| while read" solution, especially on an interactive session, is an oddball and simplicity wins.