Obviously a user can modify their own files. The idea is if you compromise unprivileged user "scott", with their account, you can't harm other users or the system itself.

[1]easily. Technically it depends, but a hardened configuration would only give www-data permissions to read files its data files in /var/www, not write them (which includes delete), apart from things it actually needs to write like its app logs (and even then you should be using syslog facilities, which only let you write, again not delete or cause any issues). Principal of least privilege and all that. For fun, try to figure out how to ssh into your system as www-data and see the half dozen different roadblocks that come up in your way.