Adobe (and others) have offered tools like Warp Stabilizer that analyze the image to calculate movement. In my experience they are able to smooth things out a bit but nothing compared to what a gryo can do. Plus those image based tools take a long time to calculate.

Software based stabilisation morphs and creates artifacts in the video because it's tough to track motion in space from erratic camera movements - using a gyro gives your software a neat little guide on camera position during the shot, making stabilisation much more precise.

Depends on applications! Doesn't matter if you're filming your child play baseball, but if you're shooting movies you want the best you can get!

In addition to the other comments, gyro data helps reduce the computation required by a lot.

One off the main problem is a parallax. Especially if there are moving objects in the background and foreground. For example, tree branches or leaves.