Q: Is it best practice to use taxonomies (managed metadata) for all list or document columns or are there situations where using a taxonomy is not best practice?

In general, using taxonomies is a best practice for managing potential values for metadata columns. However, using a taxonomy would not be advisable in situations where:
1) The potential values for the column are infinite
2) The potential values for the column are yes or no
There is an explanation on planning metadata and term set at Microsoft TechNet that covers this topic in greater depth at: