It does simplify a lot of things.
- Opportunistically serve more efficient image formats when browsers support them without converting/storing
- Cropping and resizing without needing to build your own compute to do it (no creating and storing thumbnails)
- Watermarking on the fly (e.g., on cropped images)
You could absolutely build it all yourself, but tying it all together with your CDN and handling user uploads safely and doing auth (so users can't, for instance, just remove a watermark) isn't very easy, and it's nice to have a managed service that just does the thing.