I think a part of it is whether or not you can look put-together. An important part of any profession is whether you can look the part - not necessarily be totally hot, but definitely be clean, not scruffy, smell inoffensive, brush your hair, etc. The picture is useful in determining that, but it's also just another way to remember who you are. I read all the "but what about our MERIT?!" comments, and that's the main factor they consider in choosing you, but any other way to be memorable or at least recognizable is important. Maybe it's the shirt you wore, or the non-black suit, or the necklace, or the tie, or the hair style or arrangement, or your asymmetrical nose, or your bushy eyebrows, or your perfectly arched eyebrows, or whatever. If they can remember you, they can more accurately discuss you.
If it was all about academic achievement and merit, there would BE no interview. The interview assesses your social, personal, and non-academic qualities. Some of that is reflected in how inoffensive you can make yourself look.