I'm sure the normal maps are handled just like any other engine.
It adds a pass, or draw call, to the model. So instead of having one pass for a diffuse map you have two now. No biggie on one model, especially if it adds detail and saves a lot of polys.
But if every model had 2 passes it's essentially doubling the model count.
Source can handle it just fine though. I think Valve didn't use a lot of normals not for performance as much as art style.
(same thing happens with lightmaps, all terrain is really rendered twice).