Some fiction, including Elrod's novels, seems to assume that it is for circulatory purposes. I am inclined to doubt this, in view of the general agreement that hose who walk by night need not breathe. If the lungs are not being ventilated, the purpose of blood circulation to the tissues seems questionable at best. Assuming that blood is being digested seems much more reasonable. It raises, however, energetic issues.
Blood is an awkward material to make a living from.
Vampire bats do this, but they have very little safety margin. A bat that cannot feed on one night stands a strong chance of starving to death before the next night. They also consume large fluid volumes relative to their own body size. Assuming first a digestive system operating after the pattern of living animals, breaking down complex organic molecules to carbon dioxide and water, one can do an interesting theoretical investigation of the energy balances involved. This is alleged to be sufficient for minimal maintenance, not heavy labor.