Norwegian Cruise Line did an interesting study and that the majority of people who requested that their automatic tips be removed from their onboard accounts so they could personally tip their servers found that they didn't. (Cruise News Daily, July 26, 2004: Policy Expands/ For Different Reasons)
I think the new policy does give the crew more of an incentive and I find it much more convenient. I actually hated having to divide up the little envelopes at the end of the cruise. Now if I do want to give a person extra it makes it much easier. If I don't then I at least know the person is covered.