This benefit is most valuable during the year if you're not already Platinum and you're close to hitting a new level. If you have a flight coming up, and you go ahead and use the flexible miles to hit a higher level, it can help you on stanby/upgrades on upcoming flights, rather than waiting until December.

My first Platinum year, I used them to get to 75k as soon as I had enough. My next flight was canceled and I was put on standby on the next one, getting the last seat ahead of an (irate) Gold who got to the counter just before me. He was yelling at the GA as I was walking down the jetway. (Made me feel less guilty about jumping the queue.)