Isn't it redundant to have Versions as well as Time Machine? Versions and Time Machine seem to me to offer duplicated features: both do hourly backups, and their interfaces for browsing previous versions of files are very similar.  The only difference I can see is that Time Machine backs up all files regardless of whether their associated applications support the TM interface, so even if the app I use to view the file doesn't work in TM, I still have backups of my files - whereas Versions has to be supported directly by each application. 

I can understand having Versions' file and document versioning support there under the hood in order to enable multiple applications to open a single file without causing corruption - but why present this versioning system to the user when we already have Time Machine with the same features and a near-identical user interface?  Why use more disk space to provide the same feature twice?

Is there a crucial feature or use case for either Versions or Time Machine which means it makes sense to have both?
No it is not the same:

Versions: It is for different versions of your documents. You change something in your document and you can revert to an earlier version. This is not possible with Time Machine in this granularity. 

Time Machine: It is for backup. It handle the case that you need to recover from a hard disk crash in your mac. You can't do that with versions since versions saves your changes on the then defect hard disk. 

So they have their purpose since they „solve“ different problems.