Allowed them to interface with the non-standard display on a cheap off the shelf microcontroller, without having to waste power bitbanging. As a bonus, the bitstream also included the startup splash screen which would show instantly, before the cpu even got around to initializing the display controller.
Minor correction: the pebble time uses a standard off-the-shelf Sharp Memory LCD display[0]. These displays are commonly used on smart watches so they're not propriety to Pebble. Sharp ships these displays as complete modules, with all control logic built-in, so you just need to supply power and serial commands to drive them. Any standard microcontroller can drive these.
You're right that Pebble chose to put an FPGA between their main microcontroller and the Sharp Memory LCD though.
You can use these to replace a microcontroller doing a simple job it was not fast enough for, or burned too much power for, or you can't buy any of just now.
It feels funny to write this, because we used to say you could put a microcontroller in, in place of custom logic if it was fast enough. The best 6502 project I have seen put an 80MHz microcontroller on a 40-pin DIP format board, that bit-bangs out a 6502 on the pins. It has enough RAM to copy 64k in and execute from, where timing isn't critical.
Fabio has also done boards for the NEC V20 and 68K
High occupation projects on iCE40 LP1K (closest thing) easily clock 70-100MHz in my experience.
These devices are painfully small for something like this and it is not clear whether they have any hard adders and multipliers.
I think professionals will be more interested because of the price.