You can think of a LFS as training before actually tackling an original distribution: distributions are complex, even following the steps of a LFS won't necessarily yield a working system (lots of room for mistakes).

Or, as a base to build a distribution: you can automatize some of the process, slap a pkgsrc on top, etc.

For budding programmers, it's a great exercise: discover software, appreciate dependencies, understand components of a Linux distribution, learn how to build things from source, configure a kernel, etc.