While you are correct that Time Machine is designed for use with a second drive. But, I don't think that the main function of Time Machine is for a simple hard drive backup (But, this is the reason that it uses a second drive). The main advantage of Time Machine, that I see (at least from the keynote) is to allow a seamless backup of individual files where you can scroll through a timeline of individual changes to the files. That way, if you overwrote a file with a new version, you can go back to whichever version of the file you want to recover using a slick interface. This is completely independent of whether your first drive crashed or not.
Cheers.