I too lunge for a couple different reasons.
NEVER to tire a horse out...people who do that have missed the point.
My arab mare needs to be lunged a bit to have a good ride. I tack her up and put her through her paces in the pen. She bucks, leaps, snorts, gets all her yayas out. If I fail to longe her before riding, she is spooky and has a lot of excess energy that I sometimes do not care to deal with when I just want a leisurely ride. I also do it to work on her voice commands from the ground, which I think helps translate directly into the saddle. Not saying saddle issues should be solved on the ground and so forth...it's just another piece of the puzzle that ultimately helps you communicate easier with your horse.
There are periods when we don't ride for a couple days and have just walked in hand around the neighborhood. W/t on the line is a helpful way to continue our schooling and help keep her in some sort of workout routine.
With the new guy, we need to be excersising him but he can not walk on hard surfaces (i.e. Pavement or roads) until his feet grow out a bit more. So handwalking is out for now. In place of this, every other day we are and will be lunging him for gradually longer periods in the soft sand of the pen. He is really out of condition and has not been worked for two years...when we first started he was stubborn and obstinate and kicked. Second time around I can at least get him to go in both directions without throwing a fit and he is responding better to voice cues. It's also helping him learn that I am the lead mare here and I will not let him get away with being a butt. Easing him back into the mindset of work.
If we were not lunging I could foresee many problems down the road.
So in short...I think lunging is a useful skill. It warms them up...would you ask an athlete to perform without warming up? Taking my mare who has been napping all morning and just hopping on her and asking her to tackle some hills would qualify her as an athlete in my mind. It gets them in the mindset of schooling and is useful for those times when you aren't riding as often, or there is no other form of excersise available. Just my personal opinion, not telling anyone else how to handle their horses. What works for some people may not work for others and whatnot.