There was an article in the New York Times last year regarding early decision programs (I'm too cheap to pay the fee to retrieve it from the on line archives). The article said that UPenn had used early decision to greatly reduce the number of offers it had to make to fill its undergraduate class. My memory is a bit hazy, but I seem to recall that something like 70% of Penn's undergrad class is filled by early decision applicants. Using early decision allowed Penn's selectivity rating to skyrocket and make it a much tougher institution to get into. This allowed Penn to be able to say that its admission was more competitive than some of the other Ivies, and also to raise its standing in rankings that look at the number of offers made for each opening. The author of the article felt that early decision benefits the institution and the person that applies e.d., but harms the individual that wants to look at a number of options before making a decision.
I guess that the thinking at Penn's MSTP is that they will be able to improve their yield by filling part of their class with e.d. people, so that instead of having to make 50 offers to fill 20 spots (hypothetically), they may only need to make 30 offers. This would save them some work because they might be able to interview fewer applicants, and it allow them to say that their program is more difficult to get into than others. In addition, they will probably not need to relay as much on the wait list to fill their class. I guess this could be a good thing. For instance, people interested in Penn merely as a backup will not be holding spots that they do not really want (while waiting for offers from other schools); in the past, this has resulted in others being stuck on the Penn waitlist for long periods of time. Still, as an applicant I would be concerned about locking myself into a single program without having an opportunity to look at everything that is out there. It will be interesting to see how this works out & whether other programs follow their lead.