I can speak to why I wanted to withdraw.
1. It's still taxed as ordinary income when withdrawn, plus fees. Robert Kiyosaki was convincing to me on what the real return ends up being after taxes, fees and inflation. Though it's been a while and I'd have to research the details again.
2. Investing for the intermediate term, then readjusting, makes sense to me. However, tying up capitial long term does not. I can't tell what the world/economy will be like when it's retirement time. I can't predict anything. But I feel I have a better grasp over the next 3 to 7 years versus what will be happening in 20 to 30 years. Now it's arguable that you can mimick this in your 401(k) by reallocating your funds to different asset classes in the 401(k) as times change. I believe you can even get precious metals though your 401(k). However, that is still a bit restrictive for my personal taste. I'd rather use a Scottrade account and pay minimal fees.
That said, I am surprised at all the pro 401(K) positions from a lot of good investors in this thread. @Yuliany, I am not advising you cash out your 401(k). You're receiving some great questions from a solid group of investors here, that you should answer clearly for yourself.
I agree there should be savings or other asset classes outside of real estate. I am just not into the 401(k), and everytime I get to opportunity to get back in I just say no.