It's to stop people from buying flights in bulk and then selling them off for higher prices. This makes it fairer for everyone and stops people from buying all the cheap flights and selling them for profit, which has happened years ago when this fee was much smaller.
It was not uncommon years ago when the 1p flights and the 1 euro flights were released they would be all sold out on many journeys within an hour, the flights would then be resold by travel agents as part of packages for profit, as lets face it, with that many cheap seats you could easily recover your costs with just a small number of people purchasing the resold seats from you.
I was on several flights where there was 189 passengers booked only for the plane to be half empty. Research showed that the majority of people who were not arriving were all those who had the cheapest cost flights. Also on some flights it was the same names coming up again and again that never turned out, most likely fake names used by the travel agents over and over again on flights they intended to resell - all it meant is the people who actually wanted to fly on the cheap flights never got them because they were bought up by travel agents as in investment.
In any case, name corrections or typing errors are fixed free of charge, all you need to do is to phone up the reservations line to change the name on the ticket and they can do it no problem. This is the case for things such as missing middle names, mis-spaced names, incorrect punctuation, and typing or spelling errors. If you want to change the name totally you need to pay.