I would like to mention a couple of disadvantages of encasing a lot HTML within PHP tags. You (may) loose IDE color scheme for the HTML that is within quotes. This can make it harder to read and edit. Also, there are times when it can add a layer of complexity when you have nested double and single quotes.
Having a separate file for just PHP makes the html code a lot cleaner. As we move onto larger websites using both java-script and PHP having separate files will be an absolute necessity to keep things manageable.
Interesting fact: Increments (i++, ++i) can be used in php! It can be very useful when dealing with loops. Want to know more? Check: Three interesting facts about php.