I sew pretty regularly, and I'd say that if you sew the side seams of a handknit garment, it could really affect the drape of the sweater. This is because the machine stitches are much closer together, therefore the sweater wouldn't be able to hang as freely from the sides as it does elsewhere. Also, the stitches made with a machine, in a machine stitched handknit garment, may not be strong enough to support the weight so they might break through wearing. The side seams would also be pretty visible because they wouldn't be as loose as when you hand seam them.
I've never sewn a handknit garment before, but this is what I believe would happen. I think it would also depend on the weight of the yarn of the sweater.