That's real old school. You can tell an awful lot about someone from how they present themselves in a photo, particularly if you know how to "read" the photo. We insisted on them (as most airlines do these days), as they are a very useful screening tool.
Agree with most of the advice offered in this thread - but this has left me a bit cold. To suggest that you can, in any way, assess the suitability of a candidate from a head-and-shoulders photo on a resume seems quite far-fetched. I'd be interested in how this profiling is achieved... if the person looks fit, clean cut, military appearance, they're going to make a great pilot - and if they're overweight, balding, and don't have a striking smile - the CV gets binned?
Excepting, of course, if the person is dishevelled/unshaven/looking like rubbish in general, which would match some CVs I've seen.