I'll tell you why: IT SAVE TIME AND MONEY*.
(* in the long-run, but how long depends on your environment)
I'm not talking about "Microsoft App-V", but rather "Application Virtualization" in general. Take your pick of products.
Time-Savings - Case in Point:
You have to re-image 50 desktop computers and reload them with applications and import saved user profile data.
Option 1 - Status Quo... You install the operating system, patches and join it up to your domain, install the applications and then import the user profile data. Major time chunks: The OS, apps and user profile import. The apps alone can consume hours and hours. Think about Office 2007, IE7, special products like PhotoShop or Visual Studio or AutoCAD. That could amount to 2 or 3 hours alone. Add to that the OS itself and your talking 1/2 day per desktop.
Option 2 - Using App-V... You install the operating system, patches and join it up to the domain. Drag shortcuts off your App-V server to the desktop and then import user profile data. Major time chunks: The OS and user profile import. There is NO application installation for the products you package for App-V use. Zero. Nada. So if you use a streaming OS deployment process like RIS, WDS, SCCM or even crappy old Ghost, you can very likely replace a desktop and have it back online with everything it needs to start using it within 1-2 hours tops.
I'm aware that you can combine processes to achieve greater scale and time savings. For example, using SCCM R2 to deploy the OS as well as App-V products, in one fell swoop. Or another spin would be using VDI or Terminal Services (i.e. Microsoft or Citrix), or another direction such as VMware ACE. Regardless, the time savings of using virtualized applications is enormous. Oh yeah, and I forgot to mention the HUGE savings in crappy work dealing with install conflicts and pre-requisite checking.
Here's just one example: You reinstall a desktop with XP or Vista and you need to put Office 2007 and PhotoShop back on it. If you packaged those two and saved them in a network share, you save about an hour per product, per machine by just dragging shortcuts to them directly on the user's desktop. They double-click to launch the product (which looks like a normal desktop or start menu shortcut) and it runs. The product takes care of streaming and caching the runtime client footprint and the user doesn't care as long as they have their app. It's fantastic stuff.