It's for people who want to lend their Mac to a friend, but don't want them having access to all their already-signed in accounts, to applications like Mail, and all your files. I suppose places with public-usage Macs could also use this to keep clientele restricted to just using the web.
Also, seeing as this boots from the Recovery partition, it means that, should your Lion install go belly-up, you've still got internet access, which I think is brilliant.
The recovery and kiosk cases make sense to me, but seem pretty special-purpose.
The proposal here that doesn't make sense to me is the idea that I'm going to hand my computer to a friend (who I presumably trust with my Mac) and not trust them to sign out of my gmail when they want to check their gmail. Also, the use case of "Can I borrow your computer?" is almost always quick, and, in my experience, rebooting a Mac is not quick enough. I'd much rather give them my laptop with an incognito window open than resign myself to rebooting my laptop after they're done (even if application state saving works perfectly, rebooting is still a 30 second affair).
If they can make it quick, then it seems like a great idea, but forcing a reboot to get into this mode seems to relegate it to special cases.
If you want to lend your Mac to a friend, you setup a new account for them and then use the parental tools and simplified finder to restrict if needed beyond the new account. It is actually pretty easy.
Also, seeing as this boots from the Recovery partition, it means that, should your Lion install go belly-up, you've still got internet access, which I think is brilliant.