I don't think there's anything technically wrong with it, but it lacks features some find useful / important.
MS Backup doesn't have an integrated scheduling utility; you'll have to use the Scheduled Tasks utility. It doesn't maintain a media catalog, so there's no overwrite protection or other media management. It won't merge multiple drives into a pool. I don't think it will back up a remote system. The last time I looked at it, you could not back up to a CD / DVD drive, disk partition, logical drive, or another server; it required a locally connected physical tape backup device.
It may be an inexpensive solution for a single-server, single-backup-drive, single-operator operation. It also has the advantage of being a default application, so the backups have some degree of portability between Windows systems. In a disaster recovery scenario, you don't have to find a system running a third-party solution to recover your data.
If you're not using it or Veritas, what are you using? MS Backup isn't great, but it's a lot better than nothing.