Basically, the main reason and obvious reason is that you can download Wii Games off the internet (Bittorrent), stick it onto a CD, and play it on the Wii. So basically, you could have 1000's of Games for free. The second benefit is that you could go on a trip....lets just say....America.
You see a really cheap game but its in NTSC (American Wii Format) With a mod chip, It automatically converts a game thats NTSC to PAL (Australian Wii Format)
Also, some Chips offer you to watch DVDs on your Wii.
Basically, there are some upsides and some downsides.
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