they hold the barcode info and such. when the game is all wrapped up, and the spine card is in place, the barcode can be scanned as on any other item. after you buy it, you can remove the spine card, and the cd case has no barcode on it. that is pretty much it's primary purpose, is to leave the cd case and inserts unmarked.
as far as it's usage after the item is purchased, purely collectable.
and as for storage, they will usually fit nicely inside of the front insert booklet...
and in response to bjammzz, saturn imports have them too, as imports come in a regular cd jewel case. only outside of japan did saturn games come in those oversized things... ugh...