It puts in context what your current/previous employer thought that you were worth. The fallacy in recommending you provide past salary information (if asked) is in assuming the new employer values the same things in a candidate as the previous employer. Most people seek new employment because they are not satisfied, so why would you recommend considering a new employer with the same values?
Sure it will help you, lots of people seek new employment because they feel (and are legitimately) underpaid, undervalued, or under-appreciated. I’m not saying a candidate should go in and high-ball on salary as some sort of scam, but that they should do their homework on the local market ranges and request what is realistic based on that and their own needs. If that doesn’t fit with what the employer is willing to pay, then volunteer the information to make a better case as you suggest.
It’s not that I would have anything to hide, it’s that it’s none of their business and I am not legally obligated to provide that information as some employers try to claim. It isn’t confrontational to decline to disclose that information, however it is confrontational for employers to “require” it, it can be used as a pressure tactic meant to stack the negotiating deck against candidates unfairly.
I agree, and I would volunteer the information to make the case, my issue is with employers requiring it as a method to low-ball candidates. The compensation should match the position you are applying for, not the one you had.