First I'll say that learning to read is not a bad thing by any means. Anything new you learn is a good thing but each person needs to figure out if all the effort is really worth it. If time is limited then concentrating on something else may be a better choice.
First the pro's and con's of both. Reading music shows you what notes to play and the rhythmic value. The cons is it does not normally tell you where to play these notes. On very rare occasions if it is written for the guitar it will tell you the position.
Tabs shows you exactly where to put your fingers. No questions at all as to where they should be! Tabliture is much more guitar friendly. The negative is that it does not tell you how long to play these notes.
So what I do with my students that have no interest in reading music is we use tabs and I teach them to read the rhythms in the standard notation. This way they are able to figure out how exactly the piece of music is played rhythmically and they know exactly where they are supposed to put their fingers.
You may say well you will learn the names of the notes by learning to read music but there are other ways of doing this also. There are tones of memorization methods out there that are easy to learn.
The thing with most students is that reading standard notation is going down a dead end. If you can keep their interest beyond the first few strings you can possibly get them to learn the first position. After that only the students that are getting into jazz, classical or going onto music school will learn the other positions. Most students that are into rock styles will never bother with reading standard notation beyond the things they read in the note reading books.
Since most students want to jam and have fun playing their favorite songs using tabs and teaching them to read the rhythms will improve their playing alot more then teaching them to strictly read standard music. I also teach them what notes are on the lines and spaces on the staff when teaching theory. Yes I teach them both aspects of reading music but when they are put together most students will resist and will not practice it. So why bother if they will not practice it? It makes more sense to teach them something that they will absorb and actually work on.
What they will be more willing to work on is playing their favorite songs by tabliture and instead of working on pretty simple rhythms and learning to sight read the first position I can teach them to read very complex rhythms and learn to analyze the songs from the bands they actually want to learn. They end up enjoying themselves more which in turn they end up advancing much more quickly doing it this way. On top of that if they ever really want to learn to read music they have the tools to do it.
To end off I'm not putting down standard notation. If you are going to be a jazz, classical or studio musician it is a must. If you have a yearning to learn to read then by all means go for it. To learn how to play the guitar or even become a professional musician learning to read music is not necessary. Their are tons of very skilled and talented players out there that can't read stitch of music. Actually the only time I ever use it is when I'm teaching kids to read music. Even then this is extremely easy note reading. I'm glad I learned it but I've also been playing for around 30 yrs and I'm a guitar teacher.