The largest race producer in Seattle does this, Orca Running. They give out all kinds of crap (giant medals, you can buy race shirts, etc.) but no cups! It's super annoying as they've bought up some formerly great races in the Seattle area, like the Lake Sammamish Half. I've done the Lake Sammamish Half at least once since they took over, and even though I am not that fast - maybe 8:30 pace - it is so difficult and demoralizing to screech to a complete stop to fill the plastic cup they give you. And yeah, you basically have to get a new one every time, so I find it very hard to believe it is really an environmental win. Maybe? A lot of people do wear those water backpacks or whatever. Or maybe some people carry water. It's super annoying.
For a marathon, I think it's probably OK for people running 5+ hours, but even at 4 hours, it's a big deal to come to a complete stop.