One, yes, in the past knowing which city to contact to purchase a book was invaluable to a researcher in a world without massive, comprehensive research libraries in order to get a copy. It also helps a library purchase a book.
But, perhaps even more importantly, as I tell my students in the research class I teach, it enables a good researcher to know if a book is worth getting or looking at. It helps us assess the relative value of a book. When you are doing research in the secondary literature, you want the best sources on the topic you can get. You start by looking at who the author is, and what their area of expertise is. Someone who is a renowned scholar in US Civil War studies is likely not to be the best source for information of the evolution of female dress, 1950-1990. (Not LIKELY- that doesn’t mean they aren’t a good source, it is just following the truth that professional scholarship requires years of study in a specific area to know the field, maybe they have done all that research in that completely unrelated field, possible, but not likely). Therefore, knowing the author’s name is important. The title is also important: through the use of citation indices you can see how often other scholars are referencing the work, giving a sense as to how influential the work might be in its field. Who the publisher is, is also vital. If you are researching the Southern colonies in Colonial America, the premier publisher in that field is the UNC Press (who publishes all of the "Omohundro Institute of Early American History and Culture- OIEAHC for short- which is based in Williamsburg, VA ,a nd is part of William and Mary.) So, if you see it is UNC press, that means the book came from the most prestigious and rigorously peer-reviewed press in its field. In other words, it is about as good and current thinking on its subject as you can get.
But let’s say you don’t know who the publisher is, and don’t want to waste precious minutes of time researching online, you need to eliminate or accept the book ASAP (you only have so much funding to finance your time in the libraries / archives- you don’t waste your precious time). So, a city tells the researcher if the book was published in a well-known publishing center. If the publisher is in NYC, it is likely to be done by a larger firm that can be more discriminating. If you see Cambridge, MA- it is almost certainly an imprint (think brand, like Chevy- GM is the manufacturer, but Chevy is the name it sells under) of the Harvard University Press. If it is from Lima, OH, which does not have any major publishers, then I know that it is likely to be a vanity press; someone just paid to have someone publish their book, and I can ignore it. This situation comes up in my own research all the time- I find a book that seems to be problematic for my thesis, but has an unknown publisher in some obscure city. I pass over that book, in the immediate short term, and only when I am in the hotel, back at home, I do a quick search to see if the publisher is worthwhile. Pretty much w/o fail if the publisher is from some obscure city it is a book from a vanity press that I can ignore.
I will grant for most people in the world, knowing the place of publication is kinda pointless, but for the academic it is another valuable tool in our research kit.
So, that’s why!