At my school, we were required to live in dorms for two years. It was annoying, but good. Good because I was really, really, REALLY sick of being at home, sharing a little room and the same bed as my sister who is 5 years younger than me. It was annoying because most of the other girls were really into community building and dorm activities and gave me shit because I had better things to do (study, working constantly, etc). I don't mind being away from my family and we tend to get along better that way. After the dorms, I moved into a house near school for the summer, rather than move home, and stayed there until I got married.
You will definitely meet way more people and have a much more active social life than if you lived with your parents or alone and commuted it. Sometimes it's almost TOO much, people constantly asking you to come out and do this or that, but you will make a lot of friends fast and then have time to build more strong friendships.
Like Lara said, if you ever have to go abroad for school, this is a good way to get used to living away from home first. Our school has a CCE (cross-cultural engagement) requirement so pretty much everyone has to live in another country for at least one semester or one month, depending on if the program you choose fits with a major or minor.
There was nothing really awful about living in the dorms or traveling to another country for school.