Shrink wrapping luggage is the best way (apart from obviously not taking luggage) to deter theft from your luggage/people slipping unwanted items into your luggage. There are places like Jo'burg where you don't want to risk having things put into your bags.
It doesn't offer any legal protection, but obviously its very easy to detect if someone's tampered with your bags, and when you collect your bags and the wrapping has been damaged, you can demand the airline open your luggage with you (and therefore take responsibility for any theft etc as it obviously happened while your bags were in their care)