Ok, so I was thinking of having a friend do the art for my game, but what I wanted him to do is draw the art on paper and then simply scan the drawing and use them for my game. What are the drawbacks for doing it this way? Does is look worse than digital art? Etc.

You could, but I think overall it wouldn't be worth the trouble. It depends on how complicated the art is, and how comfortable you guys are with processing the art either way. Either he'd have to create it digitally (which assumes he knows the right kind of software), or you'd have to process the paper images (which assumes you know the right kind of software). There's going to be some processing after scanning that'll have to be done, and might be kind of hard if you're not familiar with Photoshop or GIMP (removing the background, color correction, scaling right)

Scanning art is usually only worth it if you're drawing something complicated and don't have a tablet, like a large character illustration- unless your artist is a novice at digital art. If it's more like in-game sprites, like 200 pixels[sup]2[/sup] or lower, it would probably be easier to just do it on the computer (though doing concept art sketches on paper doesn't hurt).