The only thing I could see it being useful for is maybe making it easier to find friends. Just enter their name instead of their Gamertag/PSN ID if it's long or complicated. Past that, though, nothing.
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If you can't find your "friend's" online id without their name, then you must not be that close. It's like friending that guy in high school you hung out with a few times because of mutual friends.
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I have a friend who's Gamertag is complicated, and he had to recite it over the phone. It could have taken me 1-2 seconds to just enter his real name... I'm not saying this is a huge feature that's awesome, I'm just saying this is like the only reason someone would actually like this.