Will modular materials hurt performance?

So I had this idea for the game that I am working on. Why not save time texturing things by using modular materials? Let me explain modular materials. In any 3D modeling program, I can assign certain faces to different materials. Then, when I bring it into UE4, I can put multiple materials on the same mesh based on which faces I assigned to different materials in 3ds max. So if I had a wooden mug with a metal handle, I could assign the wood polygons to one material, and the metal polygons to another material. Then I could make a wood material and a metal material in UE4, and put them in the right places. Then, if I made something else that required wood or metal, I could do that easily.

What I am wondering is why don’t people do this? It seems so easy, and I won’t have to sit down and texture every single thing in the game. It also decreases download size, because there are fewer textures to download. Also less to load into memory. So why then does everyone texture everything by hand? Why not just do materials modularly? Is there some sort of peformance issue with taking samples from many materials? Thanks.

Two reasons mostly.
First is an artistic one. You do not always have only clear materials present on your model. Sometimes you want one material softly transitioning into the other, and what is more important it will not always happen between face boundaries.
Second reason is technical. When you are assigning several materials to the mesh, it increases number of draw calls. That is generally unwanted.

On practice however, a combination of techniques is used and sometimes it is indeed more practical to just assigned several materials to a model in question.

aqkotz,
if you want to dig deeper into it, here is a great explanation:
https://simonschreibt.de/gat/renderhell/

aswell as a texturing technique, you could find interesting:
https:/docs.unrealengine.com/latest/INT/Engine/Rendering/Materials/LayeredMaterials/