I don't think it has any standard use. But it does provide useful meta-data about what web application was used to create that page, and some web apps do actually look at it (by using some kind of analytics technique) and use it for some meaningful purpose.
For instance, WordPress uses the generator meta tag for blog statistics purposes, to see which installations are using what versions:
<meta name="generator" content="WordPress 3.0.1" /> <!-- leave this for stats -->
In the past when dynamic web apps weren't that prevalent, certain web site editors, like FrontPage (there, I said it), would automatically insert generator tags when you create new HTML documents or publish sites using them. This was taken to mean "This page was created using FrontPage" or something like that. I don't think any modern editors or IDEs do this anymore, but I could be wrong.