I wouldn't say it's so you don't have to share the encryption key with your provider (you achieve that with a separate encryption key), but rather so you can use a single memorable secret for both login to the provider and local encryption.
As in, the idea is that it is used to save you from having two secrets which might be more or less easy/hard to remember.
It's a UX improvement (which might be a security imorovement on average too).
