Most of our kids we moved to a convertible carseat (facing backwards) around that time...but with our last, we somehow just never got around to it and he never seemed to care...so he was in his newborn seat until he hit...18 months? Something like that. He is way stoked tho' now to be sitting up more. So...I wouldn't 'stress' about it...I have never heard of a health or safety reason to...if someone else has, I'd be anxious to know! It's probably more stimulating for them sitting up a little taller (maybe? I mean, how much more can they really see but the back of the seat anyway?). It might be better for back muscles or sitting muscles...or something? It never seemed too detrimental for our little guy... *shrug*. Good luck :)
(I agree - check the limits on the carseat...ours went up to 35 pounds)