Why install flask webapp as a package?
What would be involved in setting up your production server to deploy everything it needs without packaging it up?

The right Python version
The right Python packages
Enough memory
Security to ensure that no one that has access to that box can suddenly commit changes to your repo

If you did package your webapp, you can mitigate or eliminate most of these issues.

The version you require would be specified by your webapp, and you'd be compelled to install it anyway.
The packages you require could be pulled down through the use of a package manager, thus eliminating any manual installation of these.
If you don't hook this package to a code repository at all, then there's no fear of intrusion from the outside.

Additionally, a package is a lot more consumer-friendly.  Sure, we as developers work just fine with setting up code and environments, but if you want to show something off real fast, the last thing you want to do is force someone to have to download all of the dependencies and prerequisites before they can run your app.
I've been looking into flask lately and when looking at the tutorial information on the flask website, they have you install the demo webapp as a python package. 
 I've seen this in some other demo flask webapps as well, but I haven't seen a reason why you would do this.  The dev server renders the app without this and I would assume that a production server would once it is set up correctly.
This is probably an issue of simply not having the right mindset, but I just can't find a reason why I want to do this.  Is it for easy replication or something else altogether?