Their purpose is to protect against arcs that occur in devices that are plugged in, not to protect the wiring itself. Think for instance of an extension cord that becomes worn and develops an intermittent connection due to broken wire inside. It could begin arcing at the point of the break. The arc wouldn't trip a breaker (it's not drawing excessive current), but, being an electric arc, is very hot and could ignite the wire insulation. Another example would be an electric blanket - fine heating element wire in something that's folded and flexed a lot. If a wire breaks, you could have a nice hot arc that's literally buried in fabric. Poof, fire. Yes, I know, reasonably conscious people would figure out that the cord or blanket was bad and simply replace it, but unfortunately there are a lot who would ignore it or be too oblivious to notice UNTIL the house burned down, and we need to protect those people from Darwin's wrath.
The earliest code in the US mandating them called for them to be used in circuits feeding bedrooms; that's the one I had to follow in my home rewire. The newer iterations may be more stringent and require them in more areas; I don't know as it's not something I currently need to worry about.
That being said, they're a royal PITA when you're working - I need to plug my miter saw into another receptacle downstairs to use it (cutting trim and flooring for instance) unless I want to get a LOT of exercise running back and forth from the third level to the basement to keep resetting the damned thing, as it seems to trip off on every second or third start of the saw. My now ex found it hysterically funny to see me storming up and down the stairs swearing like a sailor and getting progressively more pissed with each subsequent trip until I finally got smart and plugged it into the bathroom receptacle (GFCI rather than AFCI protected).
I suppose in the grand scheme of things they're beneficial, though at the same time it's annoying to be forced to install expensive devices that really are only rarely if ever going to save the day, but in the meantime can be an ongoing annoyance when trying to use power tools plugged into the receptacles that they feed.
-Pat