1) LCDs are often made with a different aspect ratio.
2) You can get fonts, icons, and other things that are designed to display properly at the different aspect ratio.
3) You can fit more information in (very handy with Excel files or getting a few more lines of code on your screen when programming).
4) The distortion is less than 7% - so for most people it doesn't matter. Of course if you must look at perfect circles then seeing them 6% thinner (or 6% taller) may be a bother. It just depends on your use.
5) On a CRT you can stretch the screen horizontally or vertically. I bet you that 99% of people after stretching their view don't maintain the 4:3 ratio. Instead they try to fit it as big as possible regardless of the final ratio. Thus getting nearly the same ~7% error anyways. Or I guess you can combine the two - get a bit more information on the screen, but adjust the monitor settings so that at 1280x1024 there is no stretching at all...