It makes the top layer of soil more available to the plant, it serves as a sort of armor for the soil (as Donald describes), it keeps down the growth of algae and moss on top of the soil, it looks nice. Top dressing is a personal choice really (beyond the role it plays in insulating dead lower leaves from soil, which is increasingly necessary for Semps and a few plants in that family), but I use top dressing pretty much always.
The downside is if you use too much rock (too thick a layer) you run the risk of blocking the exit of water from the container by evaporation, provoking rot and essentially entombing the plant. My goal is usually a layer not much more than about 1 rock thick, enough to hide the soil from view but not a lot more than that. And I usually use light, porous rock. Chunky pumice is great because the water can pass right through the rock.
