Why? I have no clue. I can speculate. FIrst, a Sparse Bundle means all the remote file system needs to provide is the ability to create lots and lots of 8MB files with the names Time Machine likes. The remote system does not need to support hardlinks, it does not need to support hardlinks between directories (most Unix systems support hardlinks, but explicitly exclude hardlinking directories). The remote system does not need to support resource forks, it does not need to support extended attributes, it does not need to support Finder flags, etc...
Time Machine puts a fully functional HFS+ file system inside that Sparse Bundle, then accesses that Sparse Bundle wrapped HFS+ file system as if it is a local file system allowing lower layer file system drivers deal with and worry about the networking issues.
The 8MB bands are not directly involved in the network traffic. That is to say, if Time Machine needs to backup a 1024 byte file, it will just write 1024 bytes (plus needed file system metadata) to the sparse bundle, and that is all the network traffic that occurs for that small file. The 8MB band containing that file will not be sent.
The 8MB bands are more useful to Time Machine as a way to give up ununsed space back to the host system when older Time Machine generations are purged.
The 8MB bands are also useful if a sparse bundle is used to hold something besides a Time Machine backup, and that bundle is being backed up by any kind of incremental backup utility that does not or cannot look inside the sparse bundle (SuperDuper, Carbon Copy Cloner, rsync, etc...). That external backup utility can then just backup the 8MB bands which have been modified. And it does not matter if the back is over the network or to a local disk. Incremental backups are always faster if you do not need to copy everything.
There was mention of compression. A sparse bundle does not necessarly have compression involved. It is sparse because any 8MB band that is totally empty can have its band deleted thus saving the host system disk space. It is sparse because not every 1 through n band needs to actually have an 8MB file associated with it. The all zero bands are the sparse holes. They can be filled in later when there is something to put in that space, and again deleted when what was there is removed, and the entire 8MB band is again totally empty.
But all I'm doing it speculating about why Apple choose Sparse Bundles. I suspect they were created for spaces efficient and backup efficient home directories encrypted in FileVault, but that once the technology existed the Time Machine team decided it was a good solution for its needs, over requiring remote file system be 100% HFS+ compatible, over regular .dmg disk images, over sparse disk images, over zip files, over name your poison storage solution. And in a future release, Time Machine may switch to yet another storage format as better solutions come along.
Message was edited by: BobHarris