...it does not belong in any named beer style, historical or modern, so then what is its purpose.
Whoa. That implies that we're all out of new beer styles for, like, ever
Seriously though: It'd be sad to discredit any ingredient just on the assumption that it doesn't belong in any named beer style. Regardless of preference, innovation is driven by curiosity, and by that itch which makes us scratch at the boundaries of things. Ridiculous as the style name is, Cascadian Dark Ales make sense, despite being perhaps overly premeditated (as well as contradictory when called Black IPA like in the days of yore).
Extending the line: chilies don't belong in beer, and neither do coffee, cucumber or, according to some purists, sugar.
Why use it, other than just to scratch that itch? I for one like the taste and smell of peat. Not just smoke, but the oily, phenolic, bituminous quality of the smoke. Much in the way that "not just any woodsmoke" will do, peat smoke imparts a flavour I find desirable in some beers. And much like hops, in some beers I want
a lot of that flavour.
Yes, I realise that's a personal thing, on top being dependent on the levels of peatiness in the malt itself.
But I hear you: if it makes no sense to you, then why use it?
No more than 0.5 oz in 5 gallons.
Maybe we really
are using different peated malts here. I used two pounds in a 2.5 gallon batch (11% of the malt bill) and it hardly came through (which, I reiterate, could be cause by the specifics of my own tastebuds but I suspect not).