On online play, you've got lag times to deal with. Even with a near perfect connection, you can still have slight differences in frames. Basically, a move that normally takes 25 frames to come out, which may be normally blockable/stepable might end up having a lot less time to react (since your input will be delayed as well).
Offline play is lagless (provided your TV doesn't have lag problems as sometimes HD TV's tend to have).
Also, in online play, you can't use audible cues, such as listening for button presses.