I thought the point of watermarking is to prevent people from using your images without your branding, but if it's done on the client side, it's easy to circumvent:
So I display watermarked images in the browser by default, primarily for convenient sharing without worrying about attribution, but make the unwatermarked images available for download if someone needs it for (b).
So this might actually be useful for my use case.
I can see this being useful for running as a batch process in Node/IO.js and uploading to, say, S3.