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Or in PvP servers, to start everyone back at the same point for a fair fight and race to the top.
During EA I re-started from scratch 6 times on my own volition, if you love this game you learn how to optimize castle building in tandem on resource management and progression.
Each time I started anew back in 2022-23 I would run to high level areas as soon as I was out of the starter crypt grab a horse from DF and swiftly claim my favorite spot near the CF border before anyone else could.
Then I started managing my own server in early 2023 which made doing everything even faster. All Public Official servers with high player traffic periodically wipe the servers to maintain stability - much like clearing a cache. However, private servers don't need to wipe at all, that is completely up to the owner to justify.
if you're having to question "what is the point" then maybe you don't really enjoy the game? That or you need find yourself a private server to carve out a new experience.