Environmental pros and cons depend on many variables. Primary considerations are how close is it to an existing reef? Is the material to be use going to last long enough to be worth putting down? Is it inert? What is the goal of reefing the material? It could be fishery or habitat enhancement, or as an underwater attraction.
I actually just started working for the Artificial Reef Program in Texas, so I'm fairly familiar with our conditions and regulations, but I know California is an animal unto itself as far as environmental regs go. There is a fairly extensive permitting process here, but we've been doing it for a while and we have some standing permits. Most of our ARs are rigs-to-reefs donations from oil and gas companies, but we also have a nearshore reef program that is more of the granite blocks and construction materials of opportunity type thing. That is more aimed at fishery enhancement as the vis is horrible in the gulf 9 miles off shore.
The main argument in ARs is the attraction vs production debate. If they are just attracting fish to a specific area, it makes them easier to catch and is therefore detrimental to the fish stocks. If it is providing additional habitat allowing for more reproduction (if the amount of habitat is the limiting factor), then production goes up and it's good for the fish stocks. That is an oversimplified version but gets the point across. That argument has nothing to do with wether it's a good dive or not though.
The other big issue is making sure it is a reefing program not an ocean dumping program.
Ships are a different thing too. I don't know off the top of my head a good example of a ship-to-reef project that everyone is happy with or that went to plan and stayed legal. That's not to say there aren't any, I just don't know of them. When we sank the Texas Clipper (and when I say "we" I mean the program, that was before my time), it cost millions more than expected and took years longer than expected due to removing all of the hydrocarbons. And few people are happy with the result because of where it is along the coast and the fact that is is on it's side. Can't win for losing I guess... Then the Oriskany was completed in just a couple years, but apparently not so... environmentally friendly.
And before anyone jumps on me about the Mighty O, I don't know the details, just the rolling of eyes the program biologist gives me anytime the subject is brought up. We won't be doing another ship anytime soon though.
You can read more about the Texas program here:
TPWD: Index Artificial Reefs Program
Chris