I, too, prefer(ed) my HTML in uppercase. So I was most annoyed that not only was XML case-sensitive, but XHTML specified lowercase. I've found that in mixed-case pages, upper-case tags stand out a little more, but (as Karsten said) syntax-highlighting is better for that nowadays, anyway. IWETHEY probably only accepts lowercase because it was coded to the standard.
We specify upper case where I work for pretty much the same reason I stuck to uppercase when I first started coding. But when we start the big switch over to XHTML, we'll probably lowercase it all.
Wade.