Well, to my mind, it solves the dilemma of having mages who can Teleport anywhere in the world instantaneously at a moment's notice.
Sure, if you are playing in an area that isnt' terribly large, it's not going to make a difference. However, for those playing in campaign worlds with well-defined geography and distance, it's an awesome limiter.
Consider this; the players have to get to a certain location to do something that will likely involve either combat or exploration. Luckily, the party mage knows the locale very well and can teleport the party there, saving them time and "random" encounters. Unfortunately, the distance is at least twice what the mage is capable of so in order to do it in one fell swoop, he'll need to memorize Teleport twice, which means he will lack for some other potentially usefull 5th level spell. Not to mention the fact that the character in question is going to have to roll twice on the Error table. Heck, there may be no intermediate location that the party can teleport to safely. It's all about choices.
From my point of view, Teleport is an enormously powerful spell, and there have been threads in the past discussing how the economy of an entire world could be affected by mass-usage of Teleportation. Now, they have cut down the power while still making the spell a handy time-saver.