Password Protected Areas that restrict access to specific pages of your site can be useful for several reasons.

These pages could be used for staff, or specific clients containing important information, diagrams, prices etc on your products or services without compromising company trade to your competitors.
example 1: Rockart Paving (login page for the restricted technical area)
example 2: The pages you are viewing right now!

Or to set up online communities containing chat rooms and message boards available to site members only.
example 3: BraveheartScotland.com (login page for member access to the password protected area)