I like it for a couple of reasons. First, it provides some means of accountability for what a person posts. If a person is abusive or insulting, or otherwise inappropriate he or she will usually suffer a bad reputation of the "unknown quantity" quickly. Most people, at heart, do care what other people think of them so avoiding a bad reputation is a deterrent to those types of posts. Most people (not everyone) are interested in what people think about what they write. Likewise, getting positive reputation for a contribution promotes more positive contributions. At the end, the forums are the better for it. You will always have a few people who will be oblivious to their reputation, and some of these people will actually have good reputations. But the ones who are abusive and don't care will be easier to spot and ignore.
Second, the better your reputation, the more points you can award to someone else when you recognize their efforts. This rewards those who build a good reputation, and gives them encouragement to maintain an interest in the forums, in a sort of self-policing fashion, to an extent.
I recognize that to a point, some people may have a higher reputation than they deserve and vice versa, and I include myself in that. The system is not perfect, but it is better than when there was no system at all. Some people may have reputations that are worse than they deserve (Woody!) or that are not as good as they deserve, but the system is a work in progress and reputations evolve. There are people on these boards who should have a higher reputation than I have, but don't for whatever reason. Eventually, they probably will. I have seen people get an incredible boost in their reputation over a short period of time by doing something remarkably good (organizing get togethers, posting really good photos, etc.).