I understand that they need your coordinates to provide location based services and advertising but that doesn't explain why they would capture that data and store it long term on the device or transfer it back to your computer.
For performance. If the mapping from cell tower ID to location is stored locally on the phone, the phone can determine your location without needing a network transaction. It saves time, and power, and data costs, and works even when the network is not available. And it is actually better for privacy than continually talking to Apple's servers.
Microsoft's phones have a similar system, but they do talk to the servers each time. Android phones have a similar system, and they do have an on-phone cache, but they limit its size a bit better.
It would probably be more efficient for the phone to close that file and start a new one periodically.
? It's a database.
The article I read reported that the archive was being copied from your phone to your computer.
When Apple revamped their location services API, the database got moved into a more public folder (on the phone), and it happens to be one that the backup system includes. The backup system doesn't list each file that needs to be backed up, it takes everything below certain folders.
This would seem to be pointless unless they want to use or sell that data later for whatever purpose they deem appropriate.
Copying the data from your phone to your computer doesn't enable them to sell it.
The fact that the data isn't even encrypted just pushes the weird factor for me a bit.
It suggests they weren't thinking about privacy, or indeed trying to hide what they were doing.