One of the key variables to any bike frame design is Bottom Bracket Drop or Bottom Bracket Height. I've included visual aides using the CAD model of my all-road bike.
The Bottom Bracket Shell is of course the part of the frame where the spindle of the crankset goes and is mounted through your Bottom Bracket Bearings.
Bottom Bracket Height is defined as the height of the center of the bottom bracket above flat, level ground when the bike is assembled. Bottom Bracket Drop is distance below the axle centerline of the bottom bracket center.
Why have two ways to measure the same thing? Well, I think the main reason is that BB Drop describes the frame, where BB Height describes the whole bike and the tires that happen to be mounted on any given day, as wheel diameter is a variable that affects BB Height.
A lower BB gives a much better center of gravity on the bike for better handling. Lowering the BB also lowers the entire position of the rider over the bike, so it becomes easier to create standover clearance without lowering the top tube as much as would otherwise be necessary. That's more subtle than the lower center of gravity, but makes a big difference in some cases.
On the other hand, if your BB is too low, you can run into issues with pedal strike. Take for instance a Mountain Bike or other all terrain bicycle -- you need that extra BB Height to make it easier to clear obstacles like logs and rocks on trails without getting your pedals and cranks hung up. Or on a fixed gear track bike where you have to pedal through every turn you run the risk of striking your pedal as you lean into the turn, which can cause an accident.
Clearly, it's important to get the design right. One big benefit of a custom bike in this arena when compared to production bikes is that a framebuilder can have a conversation with the customer and design around how the bike will actually be used. For instance, an all-road bike like mine might be designed for tires around 700x40mm in size. However, if you swap on skinny road tires, you will effectively lower the bottom bracket height about 10mm. That's a lot! In fact, I think production all-road bikes can't take full advantage of the potential for lowering the BB because they know some people will want to ride their bike with skinny road tires. When I was designing my bike I looked at geometry charts of production bikes and found they all had significantly higher bottom brackets than I think would be ideal. Knowing my needs and goals for my bike, I cut to the chase and lowered my bottom bracket significantly compared to almost every production offering in this category. My feeling is that it certainly is low for riding on trails and trying to clear obstacles, but that is perfectly acceptable for the way I want to use it, and the upside is a lower center of gravity everywhere else.
The real beauty of custom is making the bike serve your needs. Well-designed custom bicycles aren't made for the lowest common denominator or to sell well to the general public and the middle of the bell curve -- they're made for the individual who will ride it and the design centers that unique rider's proportions, riding style, goals, choice of components, and aesthetic.