There are a few reasons that appeal to people:
1. As a businessman, at times, "being flashy" is counter productive. A case like this can both protect it on a basic level as well as to make the product less flashy. The ability to appreciate understatement is something that arrives with maturity. Not that you can't put your iPad into a flashy case. Do what you want. But that is a strong reason behind these cases.
2. There is an element of security with a new device. You don't always want people to know what you have. This is different from just "not being flashy". It's about being more clandestine in general with new gadgets. Not always important or practical, but for some people in some contexts it's important.
3. The Treegloo product, which is similar to this, begins it's pricepoint at a bit less than most quality back skins. But you got a lot more features with this case (and the tradeoff is size).
For me, I'll use it for work and being out and about in coffee shops, etc. When I get home, I'll pop it out and put my smart cover back on. I also have a leather sleeve to put the ipad/smart cover in if I want to go that route. Between the three cases, pretty much all my bases are covered for all situations. It's a good feeling, and makes it versatile.