Because, as it turns out, using cryptocurrency as currency is too expensive. The exchanges let you "trade" and then settle themselves in way fewer transactions, so you don't have to pay nearly as much in fees.

It's the same reason we keep our money in banks instead of everyone owning a Fed terminal and requesting ACH pulls.

I mean, this article suggests that Binance isn’t a scam, rather it has a perfectly sound business model that is illegal and immoral.

Because you can't gamble if your money isn't in the casino.

Often it's a desire to be able to quickly run a trade or arb play.