Not all people pack these bags, they are not a compulsory item, only recommended.
The "windbag" is definetely not for emergency situations only. They are very commonly used when taking a short break during hiking as well, especially in winter.

The bags are used in any situation when you need to get away from the elements, e.g. hard winds when no natural cover exists and a tent would perhaps be too difficult to set up or if you didn't bring one! Perhaps you are wet and need to change your clothes or need to tend to your injured or sore feet and the rain is pooring down, then the windbag is a great piece of kit.

The bag is quite versatile, you can set it up as windscreen, you can sit on it, use it as a groundcover for your tent or sleeping bag, use it as a signaling device, waving it about to attract attention.

People do generally not use it as an overnight camping option, unless it is a more extreme situation but in calm weather I cannot see any reason not to, the ventilation is more than adequate for it. The bag however isn't "tent-shaped" and do not provide the same amount of room as a tent would.

During a ski patrol about 16 years ago, it came very handy indeed. I, and another guy, were on our way to a cabin in a remote region of northern Sweden and a storm was on its way, but we had to go, (this was during my military service). The snowstorm was over us quite fast and I decided early that we had to dig in (make a snow pit) and sit out the storm in the windbag. Sitting on our backpacks eating canned food, packets of butter and chocolate we endured 27 hours before we could move on. The bag helped keep us snug and since then I never hike in the north without one.