On the Internet, merely blocking eavesdropping is a big practical win
One of the things said against many basic encryption measures, such as SMTP's generally weak TLS when one mail server is delivering email to another one, is that that they're unauthenticated and thus completely vulnerable to man in the middle attacks (and sometimes to downgrade attacks). This is (obviously) true, but it is focused on the mathematical side of security. On the practical side, the reality is simple:
Forcing attackers to move from passive listening to active interception is almost always a big win.
There are a lot of attackers that can (and will) engage in passive eavesdropping. It is relatively easy, relatively covert, and quite useful, and as a result can be used pervasively and often is. Far fewer attackers can and will engage in active attacks like MITM interception or forced protocol downgrades; such attacks are not always possible for an attacker (they may have only limited network access) and when the attacks are possible they're more expensive and riskier.
Forcing attackers to move from passive eavesdropping to some form of active interception is thus almost always a big practical win. Most of the time you'll wind up with fewer attackers doing fewer things against less traffic. Sometimes attackers will mostly give up; I don't think there are very many people attempting to MITM SSH connections, for example, although in theory you might be able to get away with it some of the time.
(There certainly were people snooping on Telnet and
connections back in the days.)
If you can prevent eavesdropping, the theoretical security of the environment may not have gotten any better (you have to assume that an attacker can run a MITM attack if they really want to badly enough), but the practical security certainly has. This makes it a worthwhile thing to do by itself if you can. Of course full protection against even active attacks is better, but don't let the perfect be the enemy of the good. SMTP's basic server to server TLS encryption may be easily defeated by an active attacker and frequently derided by security mavens, but it has probably kept a great deal of email out of the hands of passive listeners (see eg Google's report on this).
(I mentioned this yesterday in the context of the web, but I think it's worth covering in its own entry.)