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Centralized SSRS instance using multiple data sources

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What are the pros and cons related to having one central reporting services instance used by different developer groups that uses multiple data sources to access different database servers? For instance, I know a pro would be that we would only be paying for one license. A con would be that there is a single point of failure for every report. Do many shops use this design? We have several SSRS installs but each one is on it's own app server that creates the SSRS databases on the database server that houses the user databases that the reports will be using. By doing this we are paying for multiple licenses. Could we just have one centralized SSRS install and utilize all of these same reports by creating data sources for each that would point to the appropriate database server?

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