The main use-case of this is so that Mozilla doesn't have total control over what extensions are allowed to be installed.
It can also be used so you can install extensions you built-from-source.
[1] Yes, by now there's an official Webextension version of DownThemAll around again, too, but that's too much hobbled by the limitations of the Webextension API, i.e. can't download to outside of the official Downloads directory, can't intelligently/properly handle file name conflicts with already existing files [2], etc.
[2] Most importantly, the Webextension API doesn't seem to have a "skip the download if the file already exists" option – it's only overwrite, rename the new download, or prompt, and Firefox doesn't even support the "prompt" option.