It reduces your health regeneration, though not by much.
I play battle medic, so I'd rather gain health during combat.
Also, inevitable:
10:22 PM - [WKH] Sue: Dumbass
10:22 PM - [WKH] Sue: Blutsauger is for bad medics
10:22 PM - ACTION EXPLODIUM: D:
10:23 PM - [WKH] Sue: You drop health regen by 3
10:23 PM - [WKH] Sue: Fire does 4
10:23 PM - [WKH] Sue: A normal medic could survive
10:23 PM - ACTION EXPLODIUM: health regen doesnt help when I'm in actual combat
10:23 PM - [WKH] Sue: YOU'RE A MEDIC
10:23 PM - [WKH] Sue: YOU'RE NOT SUPPOSED TO BE IN COMBAT
10:23 PM - ACTION EXPLODIUM: I play battle medic
10:23 PM - [WKH] Sue: FASF
10:23 PM - ACTION EXPLODIUM: Blut is for battle medics
10:24 PM - ACTION EXPLODIUM: I heal people but I don't make it my only job
Although both of those are true, it gives the Pyro some nice range.
I'd rather have a hitscan weapon than a projectile one.
Both of those are personal preferences though.