The SM57 is a valid mic for recording a guitar amp. Personally, I prefer Sennheiser e609 silver a little, and Sennheiser MD421 a lot more.
As far as the SM57 on bass or drums, it's a perfectly good mic on snare, fair on toms, sucks on kick, is a fairly cruddy overhead, and is fairly sucky on bass.
Why record bass direct? because it works. Why add all the noise and mic bleed if you can get good sound and better isolation without all the trouble? For those who want the honest sound of a mic'd up bass, don't use an SM57. I've had good results with AKG D112 and
Audix D-6, which are also good kick drum mics. Most people prefer condensers for overheads, and I'm with them.
For the guy who is doing drums with 4 mics, try SM57 on snare, Audix D-6 or AT Pro25 on kick, and a pair of Marshall MXL 603s as overheads. I agree that 8 SM57's is just wrong. It's like a drawer full of spoons with no knives or forks.-Richie