Sounds like a "behind the firewall" solution to CI versus Circle's cloud model. I can see how it would be interesting to those that are sensitive to the cloud or have complex environment requirements.
Yup, you're right! Your tests run on your own infrastructure, in your own office, under your desk, in your data centre, where ever it may be.
When doing risk assessment on secure systems (think banking, billing, etc), some people will see uploading source code to services like Circle as a security risk.
Have you ever committed a password accidentally to a repo? I think everyone has at some point. If your code runs on any server thats out of your control, you're now at risk. Because your password is now on some random machine in the cloud. Sure - probably a low risk of actually being compromised - but for some companies - this is very important.
Cheers,
Keith from Buildbox