Why would somebody do this??

If this space is attic only, why in the world would you want insulation on the deck of the roof? If this home is located in a cold climate area, then you want the attic to be as cold as the outside air temp (or as close to it as possible). Proper vents are only used to provide a channel for air to travel when sheetrock is applied to the rafters or when you need to move air from behind a knee wall to the ridge (proper vent only provide about 2 - 2" x 4" channels). By what they have done, they have severely restricted the amount of air flow in the attic. You want to move as much air through the attic as possible - up into the soffit and out through the ridge vent.
As others already pointed out, if they felt the need for more insulation, they should have added it to the ceiling joist area.

alan