The main problem as I understand it is that nothing is encrypted between the machines. Which means that any passwords or data going across is open for the world to read. Also, the less points of entry you have to a machine, the smaller the chance of having an intruder get access to the machine. Whether the IP is static or not doesn’t really make a difference that I can see. Usually the attacks are brute force (look into blockhosts or denyhosts) and any IP is available, no matter how it is assigned.
The only advantage rsh has over ssh is that the computer doesn’t have to do any encryption, which in theory should make it faster. However, with the speed at which modern computers can do even moderate encryption levels, I don’t think it makes any noticeable difference. That is why in my opinion, there isn’t any reason to rsh.