The ability to generate more offers the ability to make up for lost coins, and slightly mitigate deflation, and not much else.
It's also a key part of the marketing spiel -- selling people on the idea that they can get bitcoin-rich for free is a key part of getting people hooked on bitcoins. If I tell you "I've invented a new currency, want to buy some?" you'll tell me to sod off, but if I tell you "I've invented a new currency, you can mine it yourself as a background process" then you might be persuaded to give it a go. Pretty soon you've got some bitcoins of your own, and every incentive to start talking them up to everyone you meet.
And as a computational physicist I think the thing that probably annoys me most about all of this is the amount of CPU time which is going to be wasted before this particular bubble ends. I could be using those millions of CPU hours to actually do stuff, y'know.
Agreed - it would be really great to be able to have a currency that gets issued to the solver of protein folding problems or something, but unfortunately I don't think those solutions have as nice mathematical properties as spinning and computing SHA hashes all day.. : )
I think the BitCoin community would be interested if you could combine folding@home, say with BTC. It seems possible to me, but of course, you'd need to be able to verify the work quickly. I agree it would be nice to do something useful with the GPU/CPU time.
The total ammount of BTC is fixed and so at some point it won't be worth it to allocate any more computing resources to it.
Even right now, I doubt you can just grab a high end GPU and get cranking for a profit, unless you manage to steal electricity or steal access into a computer you don't own.
It's also a key part of the marketing spiel -- selling people on the idea that they can get bitcoin-rich for free is a key part of getting people hooked on bitcoins. If I tell you "I've invented a new currency, want to buy some?" you'll tell me to sod off, but if I tell you "I've invented a new currency, you can mine it yourself as a background process" then you might be persuaded to give it a go. Pretty soon you've got some bitcoins of your own, and every incentive to start talking them up to everyone you meet.