It depends. The general idea is that you look at text in the terminal, so why not images too? It's a practical way to preview images on a remote host, or if you prefer working in a terminal over graphical file managers. Scripting can be very effective.
For someone making interactive programs for the terminal, for instance a file browser, it could be useful to have an image preview feature. Cf. Ranger. Chafa can be integrated via its C API or simply by calling the command-line tool.
It's definitely a niche thing, though, so don't feel bad if you don't see the utility :)