This assignment discusses the limitations of using IP-Tables in firewalls, specifically highlighting its disadvantages. The main points include the removal of the 'I' flag from the IP-chain, lack of processing for packets routed through INPUT or OUTPUT chains, and limited support for NAT and SOCKS protocols. Additionally, it notes that the absence of the 'C' command in IP-Tables is a limitation compared to previous versions. Furthermore, the report emphasizes the importance of circuit-firewall security systems, particularly SOCKS protocol, which provides secured communication between internal and external systems.