Clearly you haven't had much interaction with German PhDs. It's very common to include titles in your name (this also includes lower ones) there. Although it admittedly has become less common.

Let's not even talk about medical doctors everywhere, or formal engineering qualifications, both are very often used in letters.

The argument is that they make a direct difference to the perception of the individuals competence (and I know that for medical doctors there is a direct effect on earnings). While I don't think it would make a difference for RMS corresponding with software engineers he might be thinking it does make a difference because of his interaction with other stakeholders. Not really defending it, just offering a different perspective.