(1) You can write successful apps with CSS/Javascript. The first generation of iPhone apps were all CSS/Javascript.
(2) Apple routinely approves such apps.
(3) The advantages are that you can leverage your existing knowledge of CSS/Javascript to write apps without having to learn a new language and a new API. The disadvantage is that such apps are not as fast, flexible and powerful as compiled apps. It is exactly the same situation as on a non-mobile platform. Webapps do not compare to apps written with the system specific API.
However, in some cases they can be almost as good. For example, if the main purpose of your app is to interact with a specific web site, then a CSS/Javascript app will probably perform just as well as a compiled one.