I guess it depends on what you're using as your server code; it could be that the recommendation came from someone who hasn't heard about N/Velocity for example.
I think the main reason for client templating is that it removes the weight of transformation from the web-server.
It might also allow you to send your JSON from a dedicated box, and serve the template and client code from a different box.
To my mind, both of these 'bonuses' override the fact, that you're putting Data into the DOM that shouldn't be there. Firstly you'll have the JSON that is parsed by the template generator and then you'll have the HTML that is created.
Sure, viewing page source will look neat, but in terms of memory consumption for the browser it's bad, especially if you're in the UK and have Government contracts who mandate IE6 support.