In my experience moving from MATLAB to Python is an easier transition - Python with numpy/scipy is closer to MATLAB in terms of style and features than R. There are also open source direct MATLAB clones Octave and Scilab.
There is certainly much that MATLAB can do that R can't - in my area MATLAB is used a lot for real time data aquisition - most hardware companies include MATLAB interfaces. While this may be possible with R I imagine it would be a lot more involved. Also Simulink provides a whole area of functionality which I think is missing from R. I'm sure there is more but I'm not so familiar with R.
