Why is that handy? Well, the idea is that you're probably already looking at the point on the screen you want to move the cursor to, so instead of figuring out a complex navigation, you can type a few keys: `s` plus the letters you're looking at. Then pause for a quarter-second, and type the letter that just appeared where you're looking at. The label letters will be chosen such that none of them appear after the text you typed, e.g. if the words "car", "cat", and "can" all appear in your document, then after you press `sca` the labels `r`, `t`, and `n` will never be chosen. (But the label `d` might be chosen if the word "cad", or words containing it such as "academic", never appear in the document).
It took a little getting used to, but now I've found it's quite the fastest way to issue commands. Want to delete everything from here to that closing parenthesis right there? If you're on its matching open parenthesis then `d%` is fastest, but if you're not, then `ds)` followed by split-second pause to see the label appear (in a bright contrasting color), then type the label. Quite a bit faster than `v` plus a bunch of movement, in my experience. Once you get used to it, it really speeds you up.
And when you get down to it, isn't "once you get used to it, it really speeds you up" a description of the entire vi family of editors in the first place?