Also because GPS is unreliable in cities with tall buildings that obscure the satellites. This is important in the case of needing to make a 911 call. I don't know what the laws are around mobile phones needing to be able to place a 911 call (I know you shouldn't have to guess a passcode to do it, or at least that used to be the case), but it's possible that some of these 'location-on' things are to comply with the law.

Indeed. When I visited New York and Chicago I was surprised to find that GPS is totally unreliable. I would find myself walking several street corners without getting a signal.

I'm used to European cities, crowded, but without skyscrapers and in my city GPS is very reliable, but I realized that's only because we don't have tall buildings.

Luckily WiFi based location is usually shockingly accurate.