I'm guessing it makes them easier to steer under power, but I'm not sure about that... (Greg?) It could also be that the loading of the rear tires is significantly higher and helps to reduce the tire radius a bit, reducing the effective gearing difference (again, just a guess).
As far as the question about damage goes ... just don't drive around on pavement all the time and they'll probably be okay.
The current subaru center diff also has this feature, the diff is 1:1.1 with a viscous LSD pack, this slightly "preloads" the LSD and provide faster response. (Also causes the transmission to make some serious noises when decel in low gears.)