EFD is about five miles or so from NASA. And yes, many of the people on those flights work for NASA or the other Clear Lake area aerospace firms.

I live about the same distance from EFD as IAH, and frequently use EFD for personal flights because of the free parking and extra segments. I've never had a flight cancel or be late, although I've heard a lot of stories of that happening, especially during bad weather (so far I've only flown the shuttle in good weather). I imagine that the ERJs will improve reliability somewhat when they start the route next month.

As for why the flight is flown, a lot of it comes down to convenience and competing with WN at HOU. Because EFD is such a small operation, and so many of the passengers who use those flights live within 10 miles of the airport, there are many times of the day that it is faster to go to EFD, fly to IAH, and have a layover there than it is to drive across Houston to IAH and have a longer wait due to longer checkin and security lines. The free parking close to the terminal is an added plus.