In military use, the .50 (and 14.5mm) rifles are intended to be used mainly for disabling valuable enemy equipment, by destroying or damaging parts that can't easily be replaced. For example, a .50 round through the "black box" that controls the launching and targeting on a SCUD makes that missile absolutely USELESS. Similarly, a .50 round through a multi-million dollar Hind helicopter transmission stops that helicopter from being used against your forces, without having to actually destroy that helicopter. Shooting a satellite dish or transmitter array prevents your enemy from communicating with his troops in the field. There are lots and lots of targets like this from a military standpoint, and when you compare the "cost" of a well-trained rifleman, a $1000 rifle, and a $2.50 .50 BMG round to the "cost" of an air strike or infantry assault to do the same thing, it just makes sense to use the .50 sniper. Even with the DU rounds, though, I think the story about shooting tank drivers is an urban legend; it IS confirmed that these were used in the Gulf War to disable SCUDs.
From a civilian usage standpoint, being able to consistently bullseye a 4 foot target from 1000 yards is appealling for the same reason a sub-MOA group at 100 yards is; the last I heard, the record for a .50 rifle at 1000 yards (5 shots) was around 3 and a quarter inches.
I've shot the Iver Johnson / Research Armament Industries .50, and I can say that the recoil was about the same as a pump-action 12 gauge with full-house slug loads; it wasn't nearly as uncomfortable as I thought it would be, and if I won the lottery, I'd probably look at buying one.
Stacey C.