I don’t know what the argument is against showing favicons in Safari’s tabs, but I can only presume that it’s because some contingent within Apple thinks it would spoil the monochromatic aesthetic of Safari’s toolbar area. I really can’t imagine what else it could be. I’m personally sympathetic to placing a high value on aesthetics even when it might come at a small cost to usability. But in this case, I think Safari’s tab design — even if you do think it’s aesthetically more appealing — comes at a large cost in usability and clarity. The balance between what looks best and what works best is way out of whack with Safari’s tabs.
If that is the reason why there are no favicons in Safari tabs, I believe Apple is taking there quest for design too far. Apple gets blamed for always leaning towards form-over-function. I could see every time why some groups might support the said decision. But this time, I just cannot fathom how someone can find this to be a releasable solution. This is senseless.