Actually, prior to 1828, all of the states awarded electoral votes by congressional district. This lead to no one candidate getting a majority in the 1824 election, so the House of Reps chose the winner (as per the Constitution). The shenanigans that went on behind the scenes seemed to reek of corruption (search for 1824 Corrupt Bargain on the 'net to learn about it), so states began adopting the "winner take all" formula that is most widely used today.
One advantage of awarding electoral votes by district is that corruption in one district won't influence the outcome of other districts - so the Florida 2000 fiasco would not have happened. One potential disadvantage (depending on your point of view) is that third parties would begin to actually win electoral votes and make it harder for the two major parties to get to a majority.
I wonder would it reduce or increase gerrymandered districts ?