I am lucky in that my parents, although they made financial sacrifices to do it, were able to give their kids the opportunity to have music tuition.
I had lessons, so can read music. I am also lucky because I have had many chances to play by ear in less formal situations. I do not find that one method affects the other in a negative way, in fact, I think they run alongside each other. Sometimes I play music with a mixture of musicians, some who read and some who don't, together. Sometimes it is easier to say...transpose up a minor 3rd to one and use capo 4 to another person...it is good to be able to explain things in several different ways. If you only use one method of playing, I really don't see why some need to knock other ways, they are all valuable and unless you use it, how do you really know whether it is worthwhile.
I know some musicians who imply that because they are 'classically trained' they can't/won't play without written music...I would suggest that being classically trained is different to being closed minded. True education about any subject, makes you want to find out more and more, not restrict you and place walls around you.