Studies have shown that true reading (and educational) success comes from love of reading, not from memorization and words. And by age 10, the early readers are at the same level as the late readers, so long as they both love to read. So it equals out.
Now... I've read good and bad things about it. So the good first.
A child who is reading already will be successful when reading in school. This gives them more self confidence in reading and helps them succeed in school more. When I was in school, I was an advanced reader, and you go into a class with other kids at your level, and you know you're reading better than the other kids. You don't want to be with the 'slow' readers, and you feel pretty proud at being a bluebird reader or whatever.
Parents often don't know how to teach their children to read. This (along with Hooked on Phonics and many other programs) give parents a guide and help them become involved in teaching their children to read, along with other things when the child starts school. Most successful children in school have parents who tutor them.
That's about it. Now the bad.
By pushing children, especially boys, to read early it can make them hate to read.
There are studies that suggest that children who read too early, especially boys again, can have eye tracking issues, causing problems with dyslexia or something similar. Basically our eyes are meant to go across the page to read a sentence after we're about 7. Pushing before then may be straining the eyes and the portion of the brain developing for that. (If you decide to let your child read before 7 they suggest keeping the sentences short so that they're not reading across the page but just one or two words at a time.)
Reading early does not mean that they are smarter. By 10, everyone seems to catch up and it's the ones who love to read that succeed, not the ones who started at 2.
Focusing too much on reading rather than active play can cause damage to portions of the brain that are developing at this time connected to balance, play, etc. In other words, a 2 year old doesn't need to read. But a 2 year old does need to learn to walk along a wall balancing, to bounce a ball, to kick a ball, to pour from one cup to the other, etc. The brain develops these areas before it develops those areas used in reading, and there's some studies that suggest that when you push one area of the brain before it's ready then you cause underdevelopment of other parts of the brain, or problems later on.
First link, someone's opinion on Baby Can Read specifically.
Second link, note they say that one of the possible problems with reading dysfunction is the lack of the left and right hemisphere of the brain working together right. Some argue this is because of lack of stimulating play and the tracking ability not being developed before reading is pushed.
Third link, article talking about the push to wait until a child is 7 before starting 'formal learning.'
Fourth link, a clip from an article arguing that pushing kids to read before 8 delays verbal skills.
Next two links are talking about the importance of physical play in child development and later educational skills including literacy.
Personally I decided that if I can encourage her to love books, and show her how much mommy and daddy love books (she sees us reading more than we read to her...) then that will serve her much better than the program. We're working on ABC's now just with the song, no pressure and no pushing, focusing more on colors and numbers and such than reading. She already is memorizing some books (she's 2) and reading them to her dollies without any pressure from us, so I feel that's a good way to do it. Formally I'll start her about 5-6 with word and phonic recognition, and 7-8 work on actually reading, unless she does it earlier herself. Love of books is our focus right now, and interactive imaginative play.