Why is try {...} finally {...} good; try {...} catch{} bad?

The big difference is that try...catch will swallow the exception, hiding the fact that an error occurred. try..finally will run your cleanup code and then the exception will keep going, to be handled by something that knows what to do with it.

Finally is executed no matter what. So, if your try block was successful it will execute, if your try block fails, it will then execute the catch block, and then the finally block.

Also, it's better to try to use the following construct:

using (StreamReader reader=new  StreamReader("myfile.txt"))
{
}

As the using statement is automatically wrapped in a try / finally and the stream will be automatically closed. (You will need to put a try / catch around the using statement if you want to actually catch the exception).

Because when that one single line throws an exception, you wouldn't know it.

With the first block of code, the exception will simply be absorbed, the program will continue to execute even when the state of the program might be wrong.

With the second block, the exception will be thrown and bubbles up but the reader.Close() is still guaranteed to run.

If an exception is not expected, then don't put a try..catch block just so, it'll be hard to debug later when the program went into a bad state and you don't have an idea why.

"Finally" is a statement of "Something you must always do to make sure program state is sane". As such, it's always good form to have one, if there's any possibility that exceptions may throw off the program state. The compiler also goes to great lengths to ensure that your Finally code is run.

"Catch" is a statement of "I can recover from this exception". You should only recover from exceptions you really can correct - catch without arguments says "Hey, I can recover from anything!", which is nearly always untrue.

If it were possible to recover from every exception, then it would really be a semantic quibble, about what you're declaring your intent to be. However, it's not, and almost certainly frames above yours will be better equipped to handle certain exceptions. As such, use finally, get your cleanup code run for free, but still let more knowledgeable handlers deal with the issue.