1) You want people to eventually download and re-edit, but in the mean time (or for some people) you just want to allow them to see it in their browser.
2) The adobe pdf plug-in is less than spectacular, even if you do go to all the trouble to export your office docs to pdf.
3) I'm not sure, but the pdf conversion from the 3 Office document formats must be fairly lossy. Then again, I don't know that the office document conversion to ipaper is any better.
4) The user might not have Office or a suitable clone handy.
Also, this is only slightly related to what you're saying, but you could imagine Scribd supporting more obscure document formats which are not readily converted to pdf's.
