It's pure cognitive science research exploring ideas about analogies. It's not intended to be used for anything practical.
Hofstadter's approach in copycat, letter spirit etc. comes from his physics background. If you want to understand high level cognition, start with extremely tiny toy domain and work things out there.
Hofstader's work is brilliant and it's culminated in the book 'Fluid Concepts and Creative Analogies'. Unfortunately he has not produced anything interesting since (maybe due to his personal tragedy). He just says the same things more poetically.
