Because this came up very recently in a discussion w/ poire-z, there's another advantage to using the hardware rotation: it allows you to easily take appreciable shortcuts when blitting.
On an unrelated note, this was also one of my pet-peeves with 16bpp on Kobo: it makes no goddamn sense without hardware blitting, because RGB565 is a terrible pixel format for software blitting when nothing else ever uses it.
32bpp is at least better, but is still questionable on a device that only has a 16 color palette, which, hey, an 8bpp fb handles just right, just ask Amazon
. And it's addressable, which is a plus, because 4bpp fbs are annoying as hell to handle ;p.