Compatibility. For example, FLAC is a very popular lossless format but iTunes doesn't doesn't support it. That forces many people to convert to another format. Doesn't apply in your case, but its just a good example of why you would convert to another format.
"Also, the sound quality seemed to be improved."
I believe you, but have no idea why. It could be some way that the signal gets processed making it sound different. Try converting from FLAC to WAV. Many people find that sounds much better. Nothing to loose except HD space.