The advantages of narrative text, which is defined by the presence of a narrator, are obvious: the author can create new voices, spin new worlds and indulge in what Stephen King calls the "fiction-writer's purest delight, total fabrication." The disadvantages include the blurred line between fantasy and reality that never quite clears.
Advantages in Fiction: Setting, Story and Character
Writers shut themselves off from the world because they are writing their own worlds. Characters, settings and plot lines that never happened and could never happen suddenly are possible, whether the sub-genre is mystery, science-fiction, romance, horror, drama or comedy. People act as the author wishes; settings include elements that occur nowhere in nature. Most importantly, one can shape lives. A man, a woman, a family are threatened, say, by some deadly force; they escape or are rescued by a savior, a last-minute added character, a deus ex machina.
Advantages in Fictional Voice: Truth and Variety
The author might go the way of reality and have his fabricated characters, setting and plot respond realistically -- perhaps the characters aren't rescued, but come to sadly true-to-life ends. Whether realistic or not, however, fiction's greatest advantage is in the writer's voice. Like Jonathan Swift in "A Modest Proposal," he can speak in a voice he might otherwise not possess: cruel, unscrupulous, unaffected, methodical, caring, generous, resourceful, harried, terrified, aroused. The character may be the author's true voice or his opposite, speaking lies; either way, he reflects the author's viewpoint.
The Disadvantage of Narrative: Too Much Truth, Too Soon
By contrast, the main disadvantage in narrative writing is the unspoken bargain between author and reader to stay true to both the truth and the fiction. If the author has a message and puts it into his main character's mouth as he would say it in reality, the character is no longer a person but a mouthpiece, and the author is no longer a writer but a preacher. Truth must be oblique in fiction to register with the reader; Emily Dickinson advised authors telling truth to "tell it slant."
The Blurred Line
This is the blurred line of reality vs. narratives that is fiction's chief liability: it cannot entirely reflect reality. There is more detail in reality than one can include; more twists in real stories than are believable in fiction; more unrelated characters and ideas that just don't "go together." Fiction can create reality, and select from it; nonfiction requires all things to be real.