Well, it would serve to optimize (or come close to doing so) some utility function, which might be labeled "satisfaction of demand". But who defines that utility function? Some central planner.
But how does that central planner know what I actually want? Yeah, I could tell them with my smartphone. That's going to tell them a pretty coarse approximation to what my actual desires are, though.
For example: Life Savers candy. People choose to buy the stuff. A roll of them costs, what, $1? But how many people are going to bother listing that on their phones? A whole lot fewer people than actually buy Life Savers, I bet.
[Edit: What's actually going to happen is that an element of politics is likely to creep into the definition of the utility function. "Oh, they shouldn't want that; they should want this instead."]
That is exactly why it is incompatible with free market. Central Planning, ultimately, only cares about what you need, not about what you "want".
Certain basic needs are definitely not created artificially. So every human being has requirement for food, clothing, shelter and the very minimum. The more I think about it, the more it seems like, for instance, primary sectors could be handled so much better with central planning. e.g. instead of growing artificially subsidized corn, grow only an amount of corn that is required by the economy (perhaps a little extra). Continuously adjust production to meet demand if it increases.
Demand for fancy food is more artificial. Maybe I love oysters but you like quail instead. So there could be a free market operating for oysters and quails.
There's a reason why nobody tries to declare food a human right and give it away for free, even though people die if they don't eat.
The Soviet Union and East Germany seem to be the only states which attempted Central Planning genuinely, and from this article and other resources, it seems the problem was simply too complex even then... at that time.