How are you going to know if you have too much crosswind for your airplane if you stay in a crab until a few feet and attempt to kick out...and don't make it out. Cessna the airplane MIGHT take it. Taildragger--good night.
Jesse it's very easy to determine. If you can't hold the centerline with aileron as you "kick out the crab" in the flare, you go around. Unless the wind is extremely ragged you can even wait until one wheel touches and see if you can hold the plane straight.
The notion of needing or even being able to determine whether you can handle flaring in a crosswind during your final approach has some serious shortcomings. For one thing when you yaw the plane at the last moment, you can take advantage of it's inertia. And there is absolutely no guarantee that the wind on final will be the wind you get in the flare or at touchdown. Gusts generally come with a change in wind direction as well as strength and the wind direction is also very likely to shift direction significantly over the last 30 feet above the ground. If that shift happens to be further off to one side then your careful prediction of success will prove false.
But the two biggest reasons to avoid a large slip down final are that it's uncomfortable for passengers and it steepens your approach significantly should you lose power at a time when it's already likely to be steeper than normal due to a strong partial headwind component.
Neither method is without issues and I think a good pilot should be proficient with either.
To Nick's original question, my answer is it depends on the airplane and situation. I have never slipped the Baron on base and rarely do so on final. For one thing the plane's inertia is high which makes it difficult to arrest excessive sink on final and the complication of slipping makes it difficult to manage the considerable kinetic energy present compared to something like a 172. In addition, with two props windmilling plus gear and fully deployed flaps there is already a lot of drag to dissipate excess energy so when a slip is "needed" it's a sign that you've really screwed things up already.
In my little taildragger OTOH, I often slip on final and occasionally on base if I'm making a really tight approach for some reason. Since it has no flaps and very little drag (because of the low approach speed) most of my approaches are flown with little or no power so there's not much sink to be gained by reducing power and that leaves slips to manage the descent angle. If I flew the approach with the kind of power typically used on a 172 during final with full flaps, I'd end up with about a 2 degree slope.
Slipping for drag increase by itself doesn't increase the danger of a stall or spin simply because done properly your airspeed should be allowed to rise somewhat during the slip and if you relax the rudder and unload slightly at the onset of any stall it will be cancelled unless you just caught your tailwheel on a powerline. Increasing airspeed a little during a slip increases the effectiveness significantly in terms of dissipating energy since the drag goes up with the square of the speed, and squaring a bigger number has a bigger effect.