Eliminating the duplicates makes it much easier to search the history for a command that was used long ago instead of having to skip over hundreds of duplicates of some non-interesting command, such as "ls".
It also makes it much more likely that complex commands used a long time are still preserved. No matter how large you make your history file, it is much more likely that it will become filled with simple commands that you do not need to recall from history, instead of keeping the complex commands that you hate to retype.
Moreover, while having a command history is useful to avoid retyping some commands, some may be less willing to preserve a history from which it is easy to discover which have been their exact actions while using the computer, though for this it is preferable to also disable the saving of the history file.
$ cat ~/.inputrc
"\e[A": history-search-backward
"\e[B": history-search-forward
To your point about computing power, I think it's only now that it's reasonable to not filter the duplicates. If I want to emulate the dedup behavior it's trivial nowadays to blindly read 1M lines of history and dedup on the fly each time. Using downstream tools doing duplicate filtering/transforming work is similarly very very fast. Disk is cheap enough that I really do want to keep every command I ever write in my history. More expensive compute and disk would make me more likely to turn that feature on, not less.
And I want my history untouched, because sometimes I forget how I solved something, go back a few months in my shell history and see the sequence of commands that I've used. I think that's a nice thing to have. And if I ever need history without duplicates, it should be easy to deduplicate it with a simple script.