Interfolio is a great service for those whose schools don't provide a letter service. I was a little worried too on whether or not it would raise a red flag for schools, but nobody said anything. No way could I imagine asking all of my LOR writers to mail off 9-12 different letters.
One BIG tip though for those who are seriously considering going to their state school- don't use interfolio for that school or schools. Just give your letter writers two SASE, one for interfolio and one specifically for your state school. Some state schools probably wouldn't like seeing that an applicant is using a service like interfolio because that would imply they are applying to 6+ schools. Certainly not a big deal for someone from a state like california or NY where there are numerous state schools and people apply to lots of out of state schools too, but I wouldn't want some state schools with a specific mission statement(Mercer, ECU, etc) to know that I'm applying to tons of schools.