It's much slower, and doesn't lend itself as well for building the program up from small, independently tested and refined pieces. The speed of that feedback loop really matters - the slower it is, the larger chunks you'll be writing before testing. I currently believe the popularity of TDD is primarily a symptom of not having a decent REPL (though REPL doesn't replace unit tests, especially in terms of regression testing).
BTW. there's another nice feature of Lisp-style interactive development - you're mutating a living program. You can change the data or define and redefine functions and classes as the program is executing them, without pausing the program. The other end of your REPL essentially becomes a small OS. This matters less when you're building a terminal utility, but it's useful for server and GUI software, and leads to wonders like this:
The engineer in me that learned about computers on a 286 with 4MB of RAM and a Hercules graphics card screams in shock and horror at the thought of letting a Cray-2's worth of computing power burn in the background. The hacker in me thinks the engineer in me should shut up and realize that live-editing shader programs is fun[1] and a great way to play with interesting math[2].
> The hacker in me thinks the engineer in me should shut up and realize that live-editing shader programs is fun[1] and a great way to play with interesting math[2].
Yeah, sure. My point is, I assume you're not impressed by shader technology here (i.e. it's not new), but the remaining parts are Lisp/Smalltalk 70s/80s stuff, just in the browser.
This loop is definitely slower than the shell or other REPL though.