Well, honestly, the question you have to ask before asking why, is 'where?' Where is the sand in the sandbox. Many players look around and <shrug> saying "I dunno!". The sand is in the factions and utilizing them to build YOUR story. NOT FDevs, your own personal story. "I'm a Pirate!" You say. Ok, but other than stealing from randoms PC's or NPC's, you can afflict your play style on particular faction NPC's, which decreases their strength within the system and if you do this consistently you can make other things happen. Like Civil War, disease outbreak, high levels of military patrols, and conflict zones. Which means you now have different roles to play if you want, you also have more credits rolling in from vastly different roles. You might attract more players into your system because there ARE things happening. Another reward is that stations also do get new items to trade when you come out of an economic boom. In Lugh we are able to manufacture personal weapons. In nearby systems, an Imperial Slave trade route has opened up between some in system stations.
With Powerplay, who knows what changes will be coming to the factional system and the mission system. What many are seeing from the Background sim is depth. A reason to play, a way to tell a story, within the galaxy of Elite.