Actually, it's probably a lot better to do it that way than on a computer - if nothing else, you can spread it out on the dinner table and get an overview. The computer screen just isn't big enough or high enough resolution to allow that kind of thing.

Another reason I like this method (and I sort of use it myself) is the same reason I don't like online bookstores. You just can't scan the shelf and grab anything that looks interesting. On the other hand, "you can't grep paper" - ie, you can't run a keyword search on your paper to find something specific very quickly. I keep some of my notes in computer form and some on note cards, and I've recently started to try to more-or-less syncronise them. That way I can both scan and "grep" my notes :-)

In my slightly compulsively organised way, I've started outlining the different plot threads, and assigning them a colour. Then each scene gets a card, and it's marked with the appropriate colour. Thread climaxes get marked with highlighter pen, and I can then lay them out on a timeline and see where I'm concentrating on one plotline too much and where I'm completely ignoring another, then decide if I want to change that. I can also see if I have two subplot climaxes too close together, and figure out what a more appropriate spacing is.

Or maybe I just like shuffling cards around and goofing off ;-)