Tradition.
I can imagine that sorting students into universities or groups on Meyer-Biggs indicators or learning types could lead to some good things.
Also it could be that the founders of Hogwarts wanted to make sure that their society is made up of 4 main character and culture lines, which all work well together in the end. When putting teams together for real world projects i enjoyed having all kinds of characters working on their respective area of interest.
What does Slytherin contribute? The Slytherin attributes are negative-sum. Whatever positive value they have is negated by the presence of opposing Slytherins; and they generate huge negative externalities.
Update: This post has also been superseded - new comments belong in the latest thread.
The second thread has now also exceeded 500 comments, so after 42 chapters of MoR it's time for a new thread.
From the first thread: