I do every week and have never ever regretted it. Being in a covers band with such a diverse range of styles has made me a better musician. Having the chance to play reggae along with blues and rock has meant I am a more rounded player IMHO than if I'd limited myself.
I think it's dangerous to limit yourself musically, take every opportunity going. However if it's an originals band with one distinct style of play that didn't tickle my pickle I don't think I'd bother. I like the diversity and, more importantly, at gigs the musical dynamics possible being in an eclectic covers band. We can cut and change as and when depending on crowd reaction. Little stolid? Try 'Dreadlock Holiday' by 10cc. Little more morose? Play 'Stir It Up'. Up for a laugh? 'Parklife' with crowd interaction is called upon! Playing at a reknowned 'musicians' venue? Whack out the Gary Moore and Cream.
We always try and introduce new tracks every so often (for our sake more than the punters'!) and one which has gone down particularly well in recent weeks is Paolo Nutini's pencil full of lead - again, not a song I would personally choose to listen to but played in our own style it's a GREAT pub track, fun and bouncy!
By my reckoning putting yourself out of your comfort zone is the only way to truly advance yourself as a musician.