I consistently see buyer after buyer under the illusion the home is guaranteed to be theirs. Buyer #1 goes on to invest financially via inspections, pre-buying furniture, etc... Then, they further invest in it psychologically, by telling their friends all about it or the kids which rooms are going to be theirs and so forth. Thus, when they get kicked out all the drama begins, even though the clause has been written against Buyer #1 from the very beginning. Anger, frustration, and bitterness now overwhelm Buyer #1 and before letting go Buyer #1 leaves claw marks all over everyone in the transaction. I believe a lot of this can be avoided if the Buyers and Sellers are fully educated about the implications of how the 'kick out' process works prior to entering into the agreement.
I've never quite understood what motivates the average buyer or seller to accept this type of clause. I've heard of examples where I could maybe see it as being applicable, such as a buyer can qualify for a loan without selling first but just doesn't want to make two house payments unnecessarily. But, from a seller's point of view, it can deter other willing and able buyers to write good bona fide contracts because Buyer #2 doesn't want the drama of waiting on Buyer #1 to perform or not. For buyers it creates an enormous amount a stress and pressure when maybe the timing just isn't right.
Ultimately, in my opinion, these types of clauses were created for the exception and not the rule. And, just like sub prime loans have been used by parties they were never intended for.