If you just coast through your days, the natural trajectory will be downward, not upward. There is nobody to tell you when to take a break and when to call it a day. There is nobody to bounce ideas off of or to chat with at the water cooler. And if you work from home and work for yourself, there is no company retirement plan already set up for you, and your taxes are not automatically withheld.
Great piece by Shawn Blanc with thoughts on working from home, specifically for those who run their own businesses. There are some great tips for budgeting, separating work and family, and many other issues that freelancers and small business owners might run into.