Personal Package Archives (PPAs): Launchpad hosts more than 6,000 active PPAs, which make it easy for developers to publish their software securely and in a place where users have easy access to it.  Without the many PPAs available on Launchpad, Ubuntu’s huge diversity of applications, which represents one of the distribution’s major selling points, would be much more difficult to maintain.

Integrating the open-source/closed-source worlds: despite its close ties to Ubuntu, Launchpad doesn’t discriminate against closed-source projects–after all, the Launchpad code itself was closed for the first several years of its existence.  To stalwart followers of Richard Stallman, this may be a bad thing.  From a practical point of view, however, Launchpad’s availability for hosting proprietary projects as well as open-source ones benefits Linux users in general, by making it easier for closed-source developers to reach them.

Build services: beyond hosting application packages in PPAs, Launchpad offers a free service for compiling binaries and building packages on different architectures.  That makes it easy for programmers who lack an abundance of CPU power and/or familiarity with Debian packaging to publish their software for Ubuntu, which in turn benefits users by making more applications available to them.

Revenue generation: while Launchpad is probably not generating much cash for Canonical at the moment, it offers a potential major revenue stream in the form of charging for proprietary development (thanks to mpt for the reminder about this in a previous post).  A fee–currently $250 annually–is required to register proprietary projects on the site.  So far, the vast majority of projects are open-source, but Launchpad has recently been pushing new beta features, such as private PPAs, that may attract more closed-source developers.