The ERDAS TITAN has a pretty informative write up on what geospatial web services are and why should we use them. Here is an excerpt from their writeup :
"Geospatial consumers need to easily ingest geo-data into a variety of desktop, Internet and 3D virtual globe applications they use in their daily work. Impediments in data delivery brought on by access or performance issues are thorns in the side of GeoJoe trying to be efficient…
On the other end of the pipe, data authors and publishers want to rapidly distribute data to their consumers (i.e. their customers, clients, users, purchasers, general public, etc.). These folks, from aerial data providers to national mapping agencies to the one-man geo-shop, need to deliver data in varying complexities and want to guarantee that the data can be immediately absorbed into applications in use by their customers."
To read the rest, please visit the ERDAS TITAN blog.