For people who can have an ongoing sexual relationship without developing an emotional attachment, then a friends with benefits situation can be healthy. For those who attach emotionally as a result of sex, though, this situation is often frustrating.
One of the realities of life in the 21st century is that single people find themselves extremely busy pursuing their career goals. As a result, many of them lack the time to devote to a full-scale dating relationship. Others have experienced unpleasant levels of drama in the dating world and just want something simple to take care of their needs. Finding a similarly minded person lets them take care of their sexual needs without having to worry about the emotional baggage that comes with a serious relationship.
If both people know what they're getting into going in, and they both know that nothing long-term is to come of the connection, then they can both have fun. They can even develop an ongoing friendship on the basis of their mutual enjoyment, but they can also get up and go to work, or go home at the end of the night, without mourning the fact that the relationship isn't "going anywhere" or lacks affective depth.