For example, at work, a network is made up of 10 workstations all connected to a switch through a patch panel. From my inexperienced opinion, it is extra cost that can be avoided; however, as I do more research it appears to be common sense to use a patch panel.
What is the need for patch panels?
The horizontal cable needs to be solid-core cable. this type of cable gives better performance, but it is much more fragile, and it needs to to terminate in a fixed location, and not be moved after installation.
Patch cords use stranded cable, which have poorer performance, but they are much less fragile.
The ANSI/TIA/EIA Commercial Building Telecommunications Cabling Standard specifies the horizontal cable up to 90 meters, and stranded patch cords not totaling more than 10 meters on each end. This gives you up to 100 meters of copper wire.
The combination of good performing horizontal cable, and poor performing stranded patch cords should pass the test suite for the cable category you installed. You could find your cable plant does not work correctly if you use stranded cable for the horizontal cable, as someone on Server Fault did.
There's several reasons:
Cable Length and rack organization
as explained by @John K in his answer this allow to adjust cable length at need. This also allow to organize the rack properly.
Cable weariness
With time the cable, and especially the connector, may get screwed up and can cause various network issues very hard to diagnose.
If you must redo the connector, you need to get someone experimented with the proper tool, and then have the cable certified again.
This will cost and will also shorten the cable.
A patch panel with, fixed cable properly attached, is much more resilient, easier to diagnose, and you only need to change the inexpensive patch cable.
Multiple usage
Structured cabling is not used only for Ethernet connection. You can use it to connect for example a phone / DSL line, a fax or other device using a RJ11 or RJ12 connector, or a console cable (very useful to get the console of a network device in your comfortable office rather than in a noisy and cold IT room).
What if you don't use a patch panel, then decide you have to move your switch further down the rack or you need to move the connection to equipment in a different location in the rack? Now your cable is not long enough to reach the new location. You are screwed because now you have to run an entire new cable through the walls. With a patch panel you would just grab a longer patch cable and be done with it.
Modularity is the degree to which a system's components may be separated and recombined.
