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Generally to get rid of bulky water Pokemon like Milotic or Vaporeon. Bulky Water Pokemon usually have more defense, sp. defense, or HP, which makes Psychic moves bounce off.
Psychic pokemon generally have good Sp.Atk, so it's good for type coverage...particularly against bulky water-types and any flying-type sweepers like Gyarados.
You want your pokemon to be able to stand up to everything, not just the pokemon that it's already strong against to begin with