Because it limits the scope of the arbiters responsibilities and capabilities, and precisely specifies their purpose.

Those benefits you're describing are the result of a writing a contract, not of embodying the contract in a digital construct [edited for clarity]

Sure. What is your point?

EDIT: I guess i'll respond to your edit with another edit. I understand your point, that you can say the same things using a traditional contract, but they don't have the same force. For example, the smart contract can automate and execute the disbursal of funds based on the attestation of some pre-defined oracle. While it's true that this oracle is not decentralized, it is now isolated and scoped. It's role is proscribed to solely this - attestation, and everything else is actuated around that oracle, in a secure and trustless way. I believe that the ability to circumscribe and scope responsibilities in a computational way has valuable benefits, insofar as it commoditizes and modularizes the processes involved. I think of it like a shipping container. Shipping containers commoditize and modularize shipping. Smart contracts commoditize and modularize adjudication.

So what does the smart contract bring that the regular written contract doesn't?

All of my responses in this thread have thus far been enumerating them.

As yodon explained, those benefits are handled just as well by ordinary contracts. I've still never got a straight answer from anyone about what smart contracts _actually_ bring to the table.

See my edited response to yodon. I'll also add, that they free up innovation in a valuable way. Take Augur, for example. If you're not familiar, Augur is a decentralized prediction market. In order for a non-crypto startup to create something like a prediction market, they'd need to develop serious banking relationships with banks. The banks could simply refuse to work with them, charge them exorbitant fees, and otherwise encumber the process.

However, since Augur is built on the Ethereum network, they didn't need to ask anyone's permission, and they don't ever need to have custody of anyone's funds. This is an example of 'permissionless innovation', to use the buzzword of the day. Permissionless innovation is understood to be one of the most important drivers of economic dynamism, and right now any sort of application that touches the financial sector is heavily burdened by the fact that our financial system is predicated on trust. Smart contracts solve that problem. This is a very subtle point, but it is extremely significant, in my opinion.