The benefit is that C-o opens a new blank line to type on, instead of prepending what you are writing to the pre-existing text on the line, which I find very distracting. Also, I might want to do a quick edit to what I have typed so far (maybe to fix a typo before I forget it's there), and then return to add new text to the line. If I open a new blank line with C-o, I just type C-e to continue typing, but if the line is still stringed together with the old line, then finding the correct point is a pita.

Note that the vi editor also has not only one, but two "open line" commands "o" and "O", for opening a line below and above the current line, respectively.