The idea behind this special folder was simple: every major software company was filling the System Folder with their own folder (named after the software companies themselves, e.g. Claris, Adobe, Microsoft). This eventually caused significant clutter inside the System Folder.
If applications were rewritten to take advantage of this special folder, their individual support files would be thrown into this folder instead.
Unfortunately, few software companies rewrote their applications to capitalise on the Application Support folder and its advantages.