There are many applications, web-based or not, that some people may not want to install or understand how to configure. By creating these images, a user can simply search for it on the ISO repo and build their droplet with the application pre-configured. Similar to how DO already has a few from popular third-party apps.
By having a separate repo, it would be for "user contributed" and at your own risk. And since a lot of users may not want it, you can activate the repo in settings so it doesn't take up space on the new droplet build screen.
A possible ISO could be a pre-configured LAMP stack for 512MB or 1GB droplet. Or maybe a PhpMyAdmin ISO, or whatever.