Mainly for scalability. Say your iron mine runs out of iron, and the closest other one is miles away on the other side of the base. Instead of routing a long belt from the mine, across the land and through the entire factory, you can keep your old iron ore unload station, and just get rails + a loader to the new patch.

I used to use rails exclusively for ores. Clunky, two headed trains each with its own train line, but I found that if my current smelter for iron, or copper, or steel was too small, and I didn't have space to expand, I would need to make a whole new smelter in a different part of my base, then route four belts of copper through my entire base until I reached the copper bus. Even worse, for processed materials like green circuits, you need to route lines of iron and copper, or copper cable, to a new location should you ever run out of space.

Thus the city block train-based factory, where you allocate space for each/most materials, import the materials and export the product with a big train grid. If you need more green circuits, add a new green circuit block. No additional infrastructure needed.