It may be more about positioning rather than it actually being used for that many icons/widgets. Imagine if you wanted to have 5 1x1 widgets all on the left half of your screen above one another on a 10x10 grid. You would resize them all to be 2x2 which gets them back to normal size. Now you can offset them by 1 grid cell so they stair-step down and are all offset from one another, yet all are still on the left half of your screen. So again, positioning is where this begins to help, now.
Too bad we can't resize shortcuts as well, then this would be more useful and less annoying to do. But I guess this is where the secondary launcher widgets (Simi Folders, for example) come in and save us.