Doing the computation near data is almost always a performance win, as the latencies for getting the data are minimal. In a typical data-intensive computation, most of the time tends to be spent in getting the data. Therefore, making data access inside the computation faster is the best way to make the whole thing fast. On my laptop it takes 2.2 ms to query one random row from a 1,00,000 row database into the client, but it takes only 0.12 ms to get the data inside the database. This is 20 times faster and this is inside the same machine over Unix sockets. The difference can be bigger if there is a network connection between client and server.

A small real-word story:

A friend of mine was called to help a large company (I'm sure you all know it, though I can't tell you which one) to try to make its e-mail sending application faster. They had implemented their e-mail generation system with all the latest Java EE technologies, first getting the data from the database, passing the data around between services, and serializing and de-serializing it several times before finally doing XSLT transform on the data to produce the e-mail text. The end result being that it produced only a few hundred e-mails per second and they were falling behind with their responses.

When he rewrote the process to use a PL/Perl function inside the database to format the data and the query returned already fully-formatted e-mails, it suddenly started spewing out tens of thousands of e-mails per second, and they had to add a second copy of sent mail to actually be able to send them out.

If all data manipulation code is in a database, either as database functions or views, the actual upgrade process becomes very easy. All that is needed is running a DDL script that redefines the functions and all the clients automatically use the new code with no downtime, and no complicated coordination between several frontend systems and teams.

If all access for some possibly insecure servers goes through functions, the database user of these servers use can be granted only the access to the needed functions and nothing else. They can't see the table data or even the fact that these tables exist. So even if that server becomes compromised, all it can do is continue to call the same functions. Also, there is no possibility to steal passwords, e-mails, or other sensitive information by issuing its own queries like SELECT * FROM users; and getting all the data there is in the database.

And the most important thing, programming in server is fun!