Firstly cooking it low and slow gives it an amazing texture. So when a cheesecake sits in the oven for this long there are chances of it curdling; specially when you use eggs. The top also dries out and develops cracks. When you bake in a water bath, the water surrounding the pan will never get hotter than 212 degree. This gives the center of the cheesecake time to cook without overcooking the outside, and also the top doesn't get dried out because of the steam produced by the water. So no cracks and a guaranteed smooth and creamy texture.