At our school, a number of students pursue GPRs, so it is not uncommon. A number go straight into work. It's really the student's personal choice. I do know that at some dental schools, the majority of the class goes straight to work, so maybe that why your classmates are ragging on you for wanting to do a GPR. It seems to be a regional trend, with more graduates of the northeast doing GPRs, and and more southern/western graduates going straight to work.
Here are my reasons for doing a GPR.
1. New location - I want to practice in a different part of NY where I currently know zero dentists. By doing a GPR there, I can meet many dentists over the course of the year before I decide which dentist I want to join as an associate. I don't want to join a private practice where I get to do all the simple operative & hygiene check while the owner dentists does all the endo & fixed; it'll take time to find the right practice and a year during my GPR will at least let me look for a good match.
2. I have no mentor - If I was to go straight to work, I'd like to work with someone who will show me ropes of transitioning to private practice. Although I'll be slow initially (straight out of dental school), I need to work for someone who is willing to be patient till I catch up in speed. I don't know anyone who is willing to take a chance on me like that straight out of school, so back to reason #1. Many students have parent/relative/friend dentists they are going to work for straight out who will be patient with them and help them transition.
3. No pressure to produce - Any private practice you join, you will be under pressure to produce. Time is money in a private office. They're not going to look favorably on you if you take 2 hours to do a 2 surface amalgam. Not that your residency wants you to take 2 hours to do that amalgam either, but in the event you did, your salary isn't going to be affected because you didn't produce enough.
4. Learn new techniques - Having done 1 crown lengthening surgery in dental school, there is no way I can be expected in private practice to be put in a room with a patient and do my second crown lengthening on my own. I have no clue what went on during the first one, and I know I'd need to ask questions during the second one. Again, the dentist in the private office may not like me wasting his/her time asking questions during those procedures where I'm a little hesitant or unfamiliar. Also, many residencies will teach you procedures you don't do in school, such as bony impactions, implant surgeries & restorations, roundhouse crown & bridge, rotary endo, etc. A residency will also give you cases to become more proficient in things you did learn in school but didn't do enough of, like crown lengthening surgeries, molar endo, esthetic veneers, etc.
5. A year to hang out - This is my personal reason and I know I have many classmates that do not have the luxury of time to do this. I really just want my year right after dental school to somewhat stress-free. The last 4 years were just brutal and I wouldn't mind a year to relax and pursue some of my non-dental interests while I do some dentistry in my GPR on the side.
6. A year to build my resume for residency - I intend to apply to specialize in a future application cycle. Many GPRs will allow you to tailor your GPR experiences if you are going to specialize to help your skills & resume out. Many programs in different specialties want to see a GPR prior to accepting the student.
The money isn't a big deal to me. I don't have anyone to support but myself, so I don't need to jump into private practice and start earning $80,000 (or more) right away. For those who need the money, they may not be able to take the time to do a GPR and look for the right associate position. Going to work straight out will guarantee a larger paycheck than a GPR. But there is always a lag period between taking the licensing exam (NERB/SRTA/WREB/whatever) and getting your license. During that time, you are a dentist, but without your license, you cannot legally work as one. And who knows, if you fail the licensing exam on the first attempt (it happens, especially on the NERB), you have to wait for the next date to remediate it. Again, you're out of work as a dentist during this time, by now, 4 months have probably gone by. If you take the GPR, you start work on July 1 (don't need a license to start) and are earning a paycheck for as long as it is taking you to pass the licensing exam. And building your skills & speed while you're waiting, nothing bad about doing that.