The siping issue
The downside is that the more siping you have, the less tread you have touching the road for any given sized tire. Dry traction suffers (but this is more of a sports car's problem).
The more horizontal siping you have on a 4x4's tire, the more edge surface area you have to gain forward or rearward traction over obstacles.
In both the cars' and trucks' applications the increase in siping effectively decreases the amount of tire rubber you have in the tread blocks. This means tires of the same compound with more siping wear faster - there just isn't the amount of rubber to do the cornering and mileage of a less-siped tire.
Load carrying tires seem to tend to have more verticle (or lengthwise) siping. They need the siping to channel water in bad conditions, but need the constant lengthwise tread to support the loads, and ditribute the weight, they carry. On some truck/SUV tires you'll see the sideways, or horizontal, sipes are nearly non-existant on the outside edges. This is to give a more supportive, longer lasting tire to trucks since trucks put more stress on the outward edges of the tires in turns. The bad part is, of course, water can't be channeled out that side as easily with that design.
Massive flat lugs on a big tire, as the original poster inquires about, give forward traction (via the edges) on rocks and some mud terrains, but they hinder in two ways:
1.) They spread the load out over a larger surface area, thus not allowing the downforce (due to gravity) in any one area to dig in as much as a thinner, or smaller lugged, tire might.
They will also act to be like the pontoons on a pontoon boat in the water, especially when the tread gets low. They'll do this somewhat even when new since they distribute the weight on the water across a sled-like (or boat-hull-like) surface (instead of the more knife-like surface of a thinner tire).
2.) They don't have the many edges that many smaller lugs will have, and these edges are the traction needed on ice (it sure ain't the rubber to ice contact doing it...).





