The real reef rock is surface rock only. The purple epoxy on the surface keeps a lot of water from penetrating into the middle... and the rock is very solid.
The dry rock has algae issues for several reasons, but mostly 1). there are rotting organics in it that are leaving the rock and heading into the tanks and 2). with the rotting organics the bacteria and micro fauna necessary to process the N and P are not in the rock where they would be otherwise. I have supposed that it takes 2 years for dry rock to be as good as it's ocean-based counterparts, but some of the dry rock is very solid and might take decades to get as porous as some live rock.
You can buy real live rock from the ocean by the box and be cheaper, or about the same, as dry rock. Any good LFS should be able to hook you up with this, or else keep looking around.
I don't know of a good reason to use dry rock, other than a unique 'scape, but you can even do that with real live rock (it can be out of the water for the time that it takes for mortar to dry).