It has multiple uses, especially if you are in wilderness.
Clean/wipe dry dishes, hands etc.
Start fire, although not as well as wood chips or other means designed for it, they're usually kept in water tight or nearly watertight container or bag, and they're close. All you need is matches(or other means of making fire) and some firewood and you'll have fire quickly, which is important if you're in risk of freezing to death. If you're using oil or gasoline to start fire, they work better if you soak toilet paper in them.
As a towel.
Even in urban environment it's handy to have something to wipe your hands with. You can fit enough of it for most purposes in pocket. Go to Comment