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I do seem to remember someone suggest that it was to produce slime eggs. In fairness, they do sell for a lot (ranging from 1k to 5k depending on color), though that still looks like too much investment for not a lot of profit to me. I'd be very curious to see someone make a game plan where the slime hutch plays a central role.
Marlon, by the way.
I was actually wondering how one handles selectively killing slime. If you're using the galaxy sword or galaxy hammer, you'll hit a lot of them at once and hit them hard, hard enough even to one-shot the weaker ones. You could easily kill some rare slime accidentally if you hit them a couple of times. On that note, I wonder if their health regenerates, but I doubt that anyone here knows this.
The hutch itself is worth building on most playthroughs, though. If nothing else, it adds slime eggs as an extra drop in the mines, adding extra passive income while killing slimes. You can demolish the building after building it, if you want, but it must be built once to unlock slime eggs as monster drops.
Aside from that, it's... okay. Not great, except for some niche playstyles. The free daily slime will be very beneficial to someone doing a fishing-based playthrough, as wild bait needs a lot of slime to craft. Otherwise, extra slime can be used for one of the decent/good fishing tackles, or crafted into eggs to be sold. If you want to raise them for iridium or diamonds, you should do so outdoors; the hutch can only hold 20, but an outdoor pen will see their numbers grow exponentially. You can get, say, 50 purple slimes cooped up, kill 30 of them in like 10 seconds, and then let the remaining 20 get back to breeding more. It's free passive iridium and diamonds, without having to enter the skull caverns.