It's a standard piece of advice for composers that we ought not set our own words. In general, I think this is true: having two pairs of ears and eyes to monitor words and music is a sensible move and there are precious few examples between Machaut and Ashley of composers who are equally gifted as poets (in Machaut's case, it is impossible decide whether the identity as poet or composer should come first) while there are — sadly — plenty of composers who have used their own texts or libretti to sinkingly bad effect. (Does anyone seriously want to go some rounds over the libretti of Wagner or Stockhausen? Seriously?)
(I think that this principle holds less for popular music, but I'm just not engaged enough in popular repertoire to venture a substantiable reason why, but it may just be that it is in popular music that a continuity to the ancient idea of poesis, in which the composition of words is inseparable from their metre, rhythm, accent, and tune, is still, to some extent, operative.)
A second standard bit of advice to composers is that it is better to set a good (or, in some cases, even a mediocre) text than an extraordinary text. Setting aside any prima-this, poi-that personal rivalries between poet/librettist and composer, the thinking here seems to be that setting a text to music requires — if the music is to be interesting on its own terms — a certain amount of pliancy, perhaps too much abuse for texts valued highly, and we are even prepared to accept a near-complete acoustical erasure of the sense and continuity of a text to the needs of dramatic and musical continuity. There is, however, so much usable room for a composer in the composition space available for setting a text between having every word clear and comprehensible and the fantastic and melismatic opposite of that, that I have to assume that this second bit of advice is not necessarily true. It may make some music-political tactical sense to avoid setting the masterworks in favor of the merely good — for example, by playing down expectations and attachments an audience brings to familar and treasured words — but I don't think that there are any unexceptionable musical reasons for this.