When you have a confirmation field, like signups that require you to type your email and then verify your email, blocking paste stops the user from typing a typo and then copy-pasting the typo into the confirmation field.

Another use case is when you want the user to type in the name of the project or resource before they delete it, sites sometimes block copy and pasting the name to avoid having users get into that habit and make a mistake.

Personally I dislike the UX, I think it's too user hostile to 99% of users at the benefit of 1% that are making a mistake that's obviously their own fault, but it does cut down on support time I assume.