Hello Doug:
Yes, the intermittency of the reeling mode and the irregularity of power in crosswind flight (with a notable exception by using flexible kites in Low radius loop) are certain handicaps and cause possibly crippling problems.
But the yo-yo mode allows you to limit the mass in flight and generate a lot of power.
And generating properly with something like a conventional wind turbine or a Kiwee requires too much lift as the dimensions increase.