About Simple Subdivision from the wiki:
Only subdivides the surfaces, without any smoothing (similar to W → Subdivide, in Edit mode). Can be used, for example, to increase base mesh resolution when using displacement maps or textured emitters with indirect lighting.
I think it's a suitable example. It's just an option to programmatically subdivide your object's geometry. It can be used to add more detail to your geometry very quick without e.g. manually placing new edge loops. The main advantage is that the modifier have no effect on the appearance of the object itself (non-destructive) unlike the catmull-clark algorithm.
For illustration purposes here is a simple test environment. I've selected the real edges of the geometry to better see the difference between both modifiers.
Example geometry without Subsurf
Example geometry with Simple Subsurf
Example geometry with Catmull Subsurf
Note: There is a interesting wikipedia article about the Catmull algorithm.