I am curious to know if there are any drawbacks or limitations of using Phonegap as compared to using Android. What else can we do that cannot be accomplished using the other platform?
Why would one specifically choose Phonegap over Android (besides budget or cross platform compatibility) or vice versa ? I am looking for clear scenarios with justifications.
Full disclosure I'm one of the core committers to PhoneGap's Android implementation so my opinion may be biased but I like to think I'm fair.
To answer your question it really depends on what your requirements are. You've already dismissed budget and cross platform which are two of PhoneGap's key benefits. For instance if I never intended to target any platform but Android I would probably go with native Android development but if we were going to other platforms I'd pick PhoneGap. Also, I'd take a look at my team, are they hard core Java programmers? Go Android. Are they HTML developers? Go PhoneGap or pure HTML5.
Also, it depends on what type of application you are writing. A first person shooter, go Android. A table driven data applicaiton, PhoneGap is the way to go.
Anyway, without knowing what type of app you are trying to develop it's hard to be specific.