Please correct me if I'm wrong, but this appears to be something that mostly solves a problem related to old BIOSes, no? Because I can "burn" .dmg and .iso etc. to SD cards or USB memory sticks and boot them just fine from EFI on my MacBook, as if they were optical discs or external hard drives. I know this is possible with most modern BIOSes, too, so apart from the actual hardware identification of the device, cleverly claiming it's an optical drive, what valuable utility does it provide, and what problem does it solve?
The isostick is also useful for some newer machines. Macs have a lot less problem booting images, as you mention.
I've found that even newer netbooks don't like booting from USB flash sticks, but will happily boot from optical drives (and thus, isostick).
Some utilities will only boot from optical drives as well, though this is less of an issue with newer utilities and OSes. Windows XP is a good example, which is still in surprisingly high use today.
Even on traditional BIOS systems, you can do tricky things like use isohybrid to generate an iso that can be either burned to optical media, or directly dd'd to a thumb drive and booted (using syslinux).
Another approach (my personal one) is to use a combination of grub/memdisk on a thumb drive to provide a list of bootable isos.
As others have pointed out in other threads, some versions of some distributions of Linux will only load their resources from an "actual" optical disc drive (e.g. /dev/sr*).
