"Actually, using less wrist motion and more from the index and thumb enables you to play faster. You are using smaller movements and ties in with the old "less is more" saying."
Nope. You're not at a serious advantage with either method (though arguments in favor of wrist motion are more easily found and generally more valid). The minimum amount of motion required to play something is the same regardless of where the motion is generated from. A case could be made, however, that wrist motion is more economical because fewer joints are being used. Either method requires practice in acheiving a consistent use of economic motion though. One thing you WILL notice as a downside to picking from the fingers is a limited dynamic range. In addition, you'll inevitably
have to use the wrist and/or elbow in conjunction with the fingers for certain techniques (string skipping, sweeps in excess of 3 strings, strumming/chordal playing) just because it's a more natural movement in many cases.
All that being said, I'm not in the business of calling any functional technique "bad". As far as I'm concerned just do what feels natural, so long as it's not causing any injury in the long run (tendonitis, carpal tunnel, and the various other thigs that an result from improper technique). I cringe when I watch certain players' technique. Marty Friedman is the first name that comes to mind...but as horrible as his right hand looks, it works for him and he hasn't sustained any kind of wrist problems that I know of. I've found that wrist motion is the most economical and effective in pretty much every playing situation, but if something else works for other people then so be it. I will say though, you are wasting your time if you are making a large effort to switch to circular picking from whatever method you are using if you think you'll be faster as a result.
If you want some players to check out to see some circular picking in action, look no further than Eric johnson (I'm an Eric Johnson fanboi btw). He even talks about it in this video:
http://youtube.com/watch?v=ACH5Z_YPmVg
2:42 is where he starts on about it. I've noticed Michael Romeo using circular picking too. Both players are anything but lacking in ability. On the other hand both Michael Angelo Batio and Guthrie Govan are strongly opposed to circular picking. My point being that you'll get amazing players on both sides of the fence. You will notice though, with enough research, that most people who circular pick do so because they unkowningly developed the habit early on as opposed to most wrist-pickers who developed that technique as the result of a very conscious effort to use what they found to be the most economical method.
/endrant