Let's say I'm selling my car privately on craigslist and the guy wants to drive my car. If he gives me his ID or the keys to his car, I'll let him take it for a spin. (Let's assume I don't want to ride with him because I'm doing something else). Most likely, he'll return because the headache of stealing my car is greater than the worth he'd get out of taking it. Sure, the odds aren't 100% he'll return it but they'll be high. Now if he shows up, has no ID, has no cash deposit, or anything else he can leave with my, the temptation to just take the car is definitely more than when I have something of his.
Cash bail has definitely been corrupted but I do think it serves a purpose of keeping people honest just like a lock on your house keeps people honest.