Short version: You need this addon both to avoid mistyped results in the suggestion lists, and to get rid of URLs from the history for sites you're never ever going to revisit, but once visited many months or years ago - which only end up consuming massive amounts of diskspace because the built-in history cleanup doesn't work.
Firefox originally had the option to expire the history after x days or amount of diskspace used. This method of retention was carried over from Netscape and worked perfectly fine since Netscape 1 - it's how the history is supposed to work. Unfortunately, for absolutely no sensible reason, the Mozilla dev team decided to get rid of that feature and replaced it with an automated cleanup that is supposed to get rid of the oldest history when it starts to affect performance, but never does. Problem with the terrible automated design is, the history mostly consumes diskspace, which doesn't affect performance, and so Firefox will keep the history forever without ever purging any part of it. Since we have the ability to bookmark pages there's never been a need to store the history for more than a few months at the most, rather we've always had a need to remove the oldest history to avoid the browser eating up diskspace until there's none left. That's where this addon comes in, and why we need it. Doesn't matter how big a harddrive is, there's never any need to consume massive amounts of space just because you can. Purging everything in my history older than 6 months cleaned up nearly 1 GB of diskspace. Given how FF stores the history that is a massive amount of URLs that should never have been stored for that long.
Cudos to the author for reintroducing the one feature the dev team never should have removed. After more than 40 versions since this critical mistake was made, it is sadly not likely that we'll ever get this much needed functionality built in again.