More often then not, there is a limited amount of storage space available on embedded devices. While the available flash memory will usually accomodate a bare OpenWrt installation, more room for applications and data can tremendously expand a device's potential. Luckily, many of these devices have these expansion capabilities built-in, for example in the form of USB ports, SATA ports, PCIexpress slots, or even storage in a network location. However, many of the applications you want to install are developed with the idea that they should be installed in the root file system (rootfs).