I'm thinking it enables apps where users can bring their own keys without exposing it to my server.
That's the only good use of this but I bet people will end up leaking their keys being stupid with it.
That's on them though. It's nice to have an option where the third party app just provides its value-add, instead of insisting on being the first party.
That's what I've done for my chatgpt UI - I store the API key and any other user config in local storage.