Why would this be done?

To use squid authentication, squid cannot be used in transparent mode. HTTPS traffic also cannot be filtered using transparent mode. When squid is run in normal mode, a proxy IP and port must be configured on each client machine, which can be tedious. This can also cause problems on road warrior laptops that come in and out of the network. Rather than resetting their proxy configuration each time they enter and leave, autoconfigure will let them come and go without much trouble.

Most, if not all, modern browsers ship with the autoconfigure setting turned off, so it may still be necessary to push/enter this setting to client PCs.  Even so, another advantage of using autoconfigure is that should squid move  to another IP address, only one file must be changed to inform the clients of the updated IP address. (This may be easy to pull off in a windows domain with AD, but not for many others!)