The OS is gradually adding actual full-screen mode, rather than "not quite full screen, but big" - which is what this does.
The green button used to work consistently in Mac OS (classic) - it was the "make the window just big enough for everything to fit" button. Sadly, that feature is even MORE useful now that people have huge screens. If the content only uses 600x800 pixels, and you have a 24 inch screen, why make the window use almost the whole screen? Looks bizarre.
I agree with another commenter here - "Why?"
But, I the answer is that there are people coming from Windows who are used to full-screen-mode, and this will help them get close to that for apps that don't use Lion's new true full screen mode.
So, good luck!