When I was in school, each GLO had it's own hall in one of the residence halls. We would paint our crest really big on it. You had to have a certain number of members living on the hall for it to officially be "XYZ"'s hall. The only exception was that APO didn't have a hall, probably because they're coed. But, Phi Beta is coed, and we did/do have a hall; it's a women's hall only.
In addition, each GLO has a "frat room" in the basement of the dorm that their respective hall is on. Some of those rooms are TINY. Ours was the second largest, which was nice. This is where we held meetings, ritual (sort of...), a few parties, etc. It's also where we store scrap books, mementos, our charter, ritual equipment.. that kind of thing. (And, over the summer, members store things like lofts and couches in there so they don't have to move them home. Another advantage of being greek
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Advantages to being in a dorm: you still meet folks outside the greek system, even your senior year. The halls aren't exclusive to GLO members, so there's always a few non-members on your hall that you get to know, and we ALWAYS got a new member or 2 that joined because they lived on our hall and had such fun with us!
Cheap, cheap, cheap!!! For me to pay both my national & chapter dues as a collegiate for an entire year was less that $150. Granted, I was paying dorm fees and for a meal plan, but at least that was incorporated into grants, scholarships & loans. (I don't know if that's possible when you live in a house?).
Not a huge deal where my campus is at, but security in general was better if you were in a locked dorm than if you were in a house. Might be a huge deal on some campuses.
Disadvantages to being in a dorm: Definately limited space and privacy for pledge activities, ritual, etc. And even parties & things. (I can't believe the number of people I saw crammed into some of the smaller "frat rooms" on occassion!) The other draw back for parties is that it was often easier to go off-campus if you were serving alchohol, which brings up driving issues, etc.
Having a place that is truly your own, where you can have all of your stuff displayed, have all of your members together, etc. is a nice idea. Although, as often as chapters lose houses (through risk management issues or financial issues) I don't know how realistic that is in this day and age.
One of my sisters whom I pledged with said the other day that she feels like the "frat room" is kind of like our "home base" as alumni. I imagine that's how people feel with their houses. It's just easier for them to go back to the house than for us to get into a secure dorm without a collegiate escort.
So, while I often think it would have been great to have a house, dorm life wasn't too bad, either.