What I DON'T LIKE about PrCs:
Level dipping. Since it is treated as just another class, you can dip in and out of as many PrCs as you want. To me this devalues the Prestigious nature of the class. Another thing I seriously disliked about PrCs is the power creep. In order to make PrCs attractive they often included powers that were super incredible and far beyond what base classes offered.
Which is why I believe that PrC should fulfill a very specific niche and then be a real master at that type of role that no other class and feat combinations can achieve. Like the Elemental Savant from Complete Arcane or that Warlock prestige class that made the Warlock's abilities more celestial in nature. Or how the Trapspringer prestige class from Dungeonscape was a master at traps, the Beast Heart Adept had a monster companion, the Holy Liberator was a more Chaotic Good Paladin, and so on. Pick an ability and be "prestigious" with it.
Not sure how that would help with Level Dipping. People do it because they want specific abilities. Most the time it's talked about it referes to people doing it in a power-gamer sense, but that is not always the case. The only way to get rid of Level Dipping is to get rid of Multiclassing, like 4E did. Not bashing it, but I absolutely detest 4E's multiclassing and Prestige Class (equivelent) idea.
On the other hand, PathFinder's Trait system does do a good job in allowing a character to mold what they are slightly to a different concept build. I'm for both Prestige Classes, some sort of Kit system, and Alternate Class features. Over all, though, I think that Prestige Classes do the job the best.
To me what works best depends on how different your concept is from the norm.
A slight change (but not one workable under current feats), such as a paladin who is an archer, can be done with alternate class features or what 3.5 did with substitution levels.
A more advanced option, like a military officer or a wizard who studies a more narrow subset of magic than a school(such as teleports) may require a prestige class to pull off.
Changes that can't be done without putting whole new mechanics in place (or the mechanics of a different class) might need a whole new base class.
I personally like the idea of the combination of feats, substitution levels , prestige classes, and new base classes to provide the player as many options to pull of the desired concept as possible, provided they are well thought out options rather than ones shoved out the door to sell more stuff.
My own gaming group does use prestige classes, but normally only one or two players per campaign ever take them. Or we might see one or two new base classes instead.