I read a couple of other threads and some people try to claim less code = fewer bugs, but that's pretty clearly nonsense otherwise minifiers would magically fix bugs.
As for why people actually use this (it seems like they really do), my guess would be that it's used for write-only code, similar to regexes.
Like, using a regex you can't deny that you get a lot of power from not many keystrokes, and that's really awesome for stuff you're never going to read again, like searching code in your editor, one throwaway shell commands.
But they also tend to be completely unreadable and error prone and are best avoided in production code.
