I investigate theoretically the performance limits for all-optical switching devices incorporating photonic crystals made of nonlinear materials operating at high bit rates. I compare two switching techniques--shifting of the photonic bandgap and the more traditional interferometric method enhanced by slow wave propagation in photonic crystals-and show that the latter always has an advantage. I also demonstrate that the benefits provided by the photonic crystal in the interferometer are still severely limited by the dispersion and become significant only in materials combining high nonlinearity, high index contrast, and high damage threshold.