"Where Black-Scholes is wrong is in assuming all the risk is in the volatility. Even though it's a simple model it's transparent - you can see the underlying assumptions. That's not necessarily the case with more complicated things such as stochastic volatility models - you have a lot less of a handle on what the return distribution is. I'd argue that you know even less about the non-normality of stochastic volatility models than you do the real stock market, and it makes them very hard to use."
-- Emanuel Derman, 'On Model Risks and Quantitative Finance,' Risk Magazine, 03 Oct 2011.