In some ways, steam distillation is more environmentally friendly since you don't need any organic solvents. The flip side is that you will need energy to perform the distillation, and since water has a high specific heat, this is not very efficient!
The separation following steam distillation is usually very simple because many of the volatile oils are not soluble in water, so you can just separate the two phases. With extraction by organic solvent, you still have to remove the solvent, most likely via distillation.