The essence of Community Wiki is not the lack of reputation, but in the two other components: the lack of authorship and the ease of editing.
Anyone with really high reputation can edit any post, but few people will actually add extra content to other people's answers. This is because it's still someone else's answer, and it would feel rude and mis-attributing. So people stick with comments to suggest fixes, so that the author can improve their answer.
When you mark a post as Community Wiki, you aren't just saying that "people can edit this". For answers, you are inviting people to work off of what you have started, and to put their contributions in directly. For questions, you are inviting people to reshape your question into what will help the site the most. The basic essence is a post or posts "for the community, by the community". I'll illustrate this with a perfect sample of the first use case.
- When you don't have a complete answer but want something to start off for others.
- Because it is a lot easier for people to find information within a single post than having to surf through pages and pages of 30 answers each, it is useful when there is a lot of content that needs to be collected from a lot of users.
Community Wiki is more likely to see use in questions on the Meta site. And, because reputation is largely irrelevant within the scope of the Meta site, the only point of Community Wiki is the ease of access for editing.
The main use case for questions is when you are asking a question that is really in the interest of the whole community, not merely the individual asking it. Primarily, these will be frequently-asked-questions, or questions scoped to building our community. By making them Community Wiki, you open up the question to be revised for people to shape it into what people actually want answers to.
So what about that other usage of Community Wiki that people see, which is "Allowing borderline questions"? This is not so much a proper usage as it is a workaround. It's basically taxing what available resources we have to support borderline cases. This is not unlike how post votes on Meta are leveraged for indicating agreement instead of how useful a post is.
Is it using the system the way it was intended? Not really, but it's what we have to work with. The basic point is that if the question is something that does fit on the site, but for which it is more likely to attract votes for popularity than for usefulness/topicality, then you use Community Wiki to leverage its lack of reputation.
[This is pending a bit of a rewrite]