I used the crap out of them dialing-in to systems back in the day. I had TELNET and FTP access to the Internet out of a dial-in to a shell on a Unix host in the mid 90s (no SLIP, PPP, or SLiRP from the provider at the time. It was great to be able to ftp down files to my home directory then 'sz' them back home.
scp and sftp are great, but the nice thing about in-band file transfers is that your shell session already has the current context for simplifying the transfer. For example, you often want to send to or receive from the current working directory, or something nearby, and interactive file globbing is just a single tab key away, without having to switch sessions, login all over again, copy paths, etc.
[1] I don't miss automatic printing without confirmation, though. The prank of `cat /vmlinuz | write user` wasn't that funny when the service desk hands you an entire ream of garbage along with a reprimand.
I’ve used it in datacenters where I’m ssh’d through three intermediate hosts, or when I’m inception-ing down into containers and vm’s
Tweeted about zmodem just last night! https://twitter.com/ryancnelson/status/1306444057602711553