The reason you generally dont want bio-wheels in a reef tank is that they are too efficent for de-nitrification and do nothing for nitrification. They host aerobic bacteria that break ammonia to nitrite then nitrite to nitrate. Nitrate is ok in freshwater and even for saltwater fish to an extent. Nitrate is not good for coral. Generally, for reef tanks you want a lot of decent live rock and a good skimmer. The skimmer removes organics before they have a chance to break down. The live rock does what the bio wheels do, but also go one step further. The aerobic bacteria colonize the surface of the rock and perform de-nitrification. Anaerobic bacteria live under the surface of the rock and break nitrates down to nitrogen, which then leaves the system through gas exchange on the surface of the water. Deep sand beds can also do both, but they are more finicky. Basically, with a bio wheel, you dont get any nitrification, and the end result is a ton of nitrates, thus "nitrate factory"
Sorry for the long post. Hope I helped.
