It's an option for those on a tight budget aka "beggars can't be choosers". Hotels are a lot cheaper if you book a (fully) refundable stay months in advance instead of waiting until you have a ticket.

Friends who booked months earlier still paid a bit of a premium. Much cheaper than now of course, but you should still budget for €150/night or so.

Of course not, it's for people who can't spend more than five bucks a night.