That is a fairly typical snubber circuit. I have seen various types, the zener configuration you have, an RC network and even a mixture of the two. When the switch turns off, the voltage on the FET rises. The rise of the voltage is due to the parasitic effects in the transformer, and the secondary side discharging.
Snubbers are designed to control this voltage rise, in this case the zener should clamp it to the rated voltage of the switch. The excess power is bled off as heat. In certain fault conditions it will end up conducting each cycle causing it to fail if the condition has not been thought about.
In other words, the zener blowing up could be a fault symptom of a fail on the secondary side (for instance part of the transformer shorting out, rectifier shorting etc.)
There is also another type of snubber known as a loss-less or resonant snubber. It uses an inductor, a capacitor and a pair of diodes to "store" the energy of the spike. This is then returned to the supply with only minor losses in the inductor and diodes. It is not often seen as the inductor is more expensive than a resistor or zener.