Why do they think people would generally be interested in clicking "Yes" on these suggestions? That they are helpfully filling in the blanks on photos I "forgot" to location-tag?
Facebook wants its users to catalog their lives. For them, this data is marketing gold. For end users, it means their content (photos, status updates, life events, etc) are categorized more thoroughly and in a more meaningful fashion (geographically, chronologically, etc).
I think that real world places are an important part of who you are. Where you're from, where you've lived, and where you've travelled to, for instance, all help tell a story about you as a person.
The way that's represented on Facebook today is the Map on your Timeline. These suggestions help you put more photos on your map so you can share experiences with friends. That trip you took to Disney World 5 years ago may be far down in timeline, but it's going to be easy for friends to find it on your Map.
Hope that helps explain the "why" a bit.