Another reason would be to justify differences in salaries. When some people are getting paid 30K more than some of their colleagues, a difference in title makes it somehow acceptable, or at least moves the debates to "should X be a senior" instead of "should X be paid that amount".

This is not ideal and should not be necessary, as in a perfect world pay bands should come from factual skills, performance and responsibility.

But I still find it better than having no title distinction while still having completely opaque salary gaps.