Before asynchronous mechanism in web development, huge transfer of data over network and slowness was a big problem. Later we got the way to send only a required portion of page to server and get it updated in webpage without flicker (by AJAX). As a web developer you know that it requires writing code in Java Script and it is not easy for all. As Microsoft always focus to provide end-user easy-accessibility they built a readymade Update Panel by putting AJAX mechanism behind the scene which can be used without writing any manual java script / AJAX code.
Update Panel are created to make the easy use. So we minimize the use of Postback and at the completion of an asynchronous call/request, a Callback take care. Though Update Panel may not so good in terms of performance compared to web methods/JSON, it is used much than them.
Note that we can
overcome this issue by handling Update Panel with Java Script or jQuery.
Avoid overuse Update Panel; But with writing/handling by your own Java Script/jQuery.

Anil KumarPosted May 16, 2012, 6:20 AM
http://www.c-sharpcorner.com/Blogs/5142/update-panel-how-to-solve-slowness-problem.aspx