The flag (with a better name) could be helpful for filesystems which can't fully support uninitialized allocated blocks efficiently. We are supporting several such interoperable filesystems (NTFS, exFAT, FAT) where changing the specification is not possible.
There is real user need despite explaining potential security consequences. Typical usage scenarios are using a large file as a container for an application which tracks free/used blocks itself. Windows supports this feature by SetFileValidData() if extra privilege is granted.
The performance gain can be huge on embedded using low-end storage and SoC. In one of our cases it took 5 days vs 12 minutes to fully setup a large file for use.