Any electronics manufacturer who has ever considered implementing nitrogen in their soldering process will tell you that the immediate and largest obstacle is cost. One has to either buy nitrogen from a vendor or install some type of nitrogen generating system. The competing reflow environment is air which is ever abundant and totally free. It is hard to compete against something that has zero cost and is available everywhere including second- and third-world countries. Nitrogen, especially high purity nitrogen (low oxygen), is not universally available.
People that have used nitrogen as a reflow environment for PCB assembly are also aware of a challenge associated with passive components such as chip capacitors and resistors (e.g. 1205s, 0805s, 0603s, 0402s, etc.). That challenge is a defect commonly referred to as tombstoning. Without the presence of oxygen, there is virtually no oxide skin that forms on the surface of the molten solder. This oxide skin imparts a low surface tension to the molten solder. Oxide-free molten solder has a higher surface tension. This means that, when the solder wets onto the terminations, the force exhibited in a nitrogen reflow environment will be greater than the force exhibited in an air reflow environment. Wetting of the solder onto the terminations can be further enhanced due to the fact that the terminations may have less oxidation as a result of being heated in the absence of oxygen. Both of these phenomena can cause wetting forces that are sufficient to pull on the termination and stand the component up on end.
But there are definitely some advantages to be had with a nitrogen reflow environment. Continuing on with the discussion of higher surface tension of the molten solder when reflowed in a nitrogen environment leads us to an advantage for applications involving fine-pitch components. This higher surface tension can reduce the incidence of bridging because the solder, once molten, will want to coalesce, this will cause the solder to want to pull back onto the pad. This mechanism can also help to mitigate mid-chip solder balls and other similar defects of solder going places where it is not wanted during reflow.
Improved wetting can also be expected when comparing nitrogen reflow to air reflow. This is pretty elementary in its principle. Surfaces, be they component leads or PCB pads, that would be prone to oxidation are not able to further oxidize in a nitrogen reflow environment because of the sparse presence of oxygen. Fluxing agents do not have to work as hard to clean the surfaces and wetting can happen sooner and faster.
Oxidation issues are not necessarily limited to component and PCB surfaces. It can also impact the solder itself. A large amount of PCB assembly is performed with solder paste. Solder paste is a suspension of solder particles in a flux vehicle. The solder particles in the paste are subject to oxidation during air reflow, especially if the flux runs off and exposes the solder particles and/or the oxidation resistance of the flux is not sufficiently adequate to protect the solder particles. This can result in a cosmetic defect often known as "graping".
Ultimately, virtually any defect associated with oxidation, even those unnamed here such as head in pillow, can usually be mitigated by switching from air to nitrogen reflow.
Arguably there will always be applications where the use of nitrogen is unnecessary. And the cost will make people think long and hard before implementing nitrogen. But, for those seeking to enhance certain aspects of the convection reflow soldering process, the use of nitrogen can be the key.