This is what I remember. Kermit hated latency, and dial up modems had that in spades. It was much slower than Z-Modem for pushing files around.
I never used the translation features, though I can think of one particular summer where that would have been very useful (had a 7E1 connection - I got files to my PC by uuencoding to screen, saving the buffer contents to my PC, and then uudecoding them locally).
FTP is another great example where people got the impression that it was prone to corrupting transfers because the default setting was to corrupt binary transfers.