Is there a reason other then the possibly historical accidental convention that we use lower-case everywhere instead of the much better UPPERCASE which increases READABILITY and uses the same amount of space on the screen? Seriously it is much easier to read. I can see no drawbacks.
We normally do not read every single letter. Instead, our brain is very good in recognizing words by their outer shape, which is much faster than reading letter by letter. But this can only work for words with distinctive shapes. In lowercase words, the occurrence of letters like d, h, d and g, p, j lead to characteristic shapes.
Image Source: http://www.personal.psu.edu/drs18/postershow/
For uppercase words the shape is always a rectangle without characteristic highs and lows. Therefore it is much slower to read. Moreover, its harder for the reader to hold his position in the text, since at first view every word looks the same. Personally I think that this would become a big issue for whole paragraphs written in uppercase.
There is a good article about this called The Science of Word Recognition and published by Microsoft as a guideline for designing interfaces.
Update: As mentioned in the comments, the word shape theory is controversial. A research at Cambridge University showed that the order or letters in a word, except the first and the last one, doesn't matter at all. Read the quote below to know what I mean.
Aoccdrnig to rscheearch at Cmabrigde Uinervtisy, it deosn't mttaer in waht oredr the ltteers in a wrod are, the olny iprmoetnt tihng is taht the frist and lsat ltteer be at the rghit pclae. The rset can be a toatl mses and you can sitll raed it wouthit a porbelm. Tihs is bcuseae the huamn mnid deos not raed ervey lteter by istlef, but the wrod as a wlohe.
This experiment shows that the static shape of a word isn't the important feature. Maybe it is the number of highs and lows in a word, who knows.
Yes the readability increases. But writing in all caps on a paper (or anything, with a pen/pencil) is slower. Using small letters is much faster. So, the computers and all other similar electronic equipment usually use it.
Moreover, how will the user know about proper nouns or names. Finding were one sentence ends and the other starts is also difficult. It is also difficult to differentiate between acronyms and usual words when in all caps.
Also, using small can also add more style in some fonts. :)