It's generally considered less than optimal, mainly because the exhaust often doesn't have enough CFM. Before I even knew anything about that, I rejected the idea. To leave enough space to comfortably cook, the microwave would have to be installed too high for my DD and me to easily reach it. Also, while I'm cooking, it would be annoying to move so someone could use the MW. Still, where space is a big issue, people do use them. If you can, use a separate hood over your range.

You can put the microwave in a cabinet. Also, some people have a range, then they put in a dual MW/oven like Advantium so they get a second oven and a MW.

If you do not like OTRs -- and the reasons you give are all valid --- you have answered your own question. It seems to me that you could do a search on "OTR" here and turn up numbers of recent threads on the subject which give you the full panoply of opinions and preferences and experiences. There are some kitchens where an OTR is the only workable choice for getting a full-size MW and range ventilation. Other kitchens may give you different option, When you read those prior threads, you will find that you will still be looking at your personal preferences. Maybe reading the posts will assure that your perferences are valid reasons for not getting an OTR?

I'll second what Ginny said because it reflects my personal perferences, too. She is right that, if you have space to put in a single wall oven, you could add a MW to that stack.

My preferences run against doing that, and favor Ginny's suggestion of a cabinet shelf (upper or lower cabinets). The reason my preferences run that way is that I am suspicious of MW durability. I personally favor countertop MW units on shelves without trim kits simply because durability can be questionable these days. MWs are made to be sold at nearly commodity prices. Installing them with "built-in" kits or in an OTR boxes makes them expensive but no better than countertop units when it comes to durability. They are not quite as much of a consumable as, say, nonstick pans, of course. What is most likely to fail in an OTR is the microwave portion.

But, you have no way of knowing if yours will be one that lasts or not. Read on-line comments on any MW unit at any retailer and you will see large numbers of complaints about every model except the ones too new to market for anybody to have experience with them. These complaints mostly come from a proportionally small number of owners. Being in a statistical minority is no help and no comfort when it is your MW that dies prematurely.

Consequently, My personal preference would be to have a MW on a shelf, whether in an upper or a base cabinet. In a small kitchen, this allows you to have a range hood (which are pretty much bullet-proof) and it frees up counter space, and it makes it easy to swap out a failed unit when the MW dies.

I have a small kitchen. Before starting on the wall above my stove in my ongoing incremental remodel, I had a large old countertop MW unit sitting on shelf brackets that held it off the counter and below the open shelving on the rest of the wall. This freed up counter space and still kept the oven floor down where it was convenient for me to reach and clean. I was planning to add a MW shelf on the bottom of the new cabinets I was making. Instead, I chose a GE Spacesaver MW which hangs from the upper cabinet. (The was a model JEM31, I think.) While it is smaller than my old, full size MW -- it is basically a shallow cabinet depth unit and not very tall --- I can still fit in large pyrex baking dishes and platters by switching off the turntable. (A lot of other MWs have manuals that forbid running without the turntable on.) It is plenty low enough for me to be able can move pans in and out easily as well as easily clean the interior, and I do not have to reach over the stove when doing these things. Worked really well for me.

These things all reflect my personal preferences, and YMMV. So, follow your preferences.

I don't rally cook with my MW, but mostly just to reheat. It is by the refrigerator, away from the immediate prepping/cooking area. It is on the lowest shelf in the upper cabinet and there is a drawer below with paper plates. I have the GE spacesaver too. The idea is that anyone who comes in to reheat is out of my way when I am cooking.