Why does iPhone and iPod touch auto-brightness setting work relative to a brightness you set rather than absolute? iPhone and iPod Touch aside, I've always considered manual brightness and auto brightness to be mutually exclusive settings.  Intuitively, auto brightness means exactly that - the device figures it out.  Why is the iOS auto brightness setting implemented relative to the manual brightness setting rather than absolute?  In other words, why is manual brightness even an option when auto brightness is selected?
Because a one-size-fits-all auto-brightness setting is going to be unpleasant for a large number of users, either because the automatically-selected levels are either too difficult to see, too bright, or eat too much battery.  The automatic setting is based on the threshold you set specifically so that the device can "figure out" ideal settings within a range that you can tolerate.

More to the point, I have a question for you.  Is there a point on the auto-brightness slider that you're comfortable with?  If not, that should be all the proof you need that the slider is necessary!  If there is a setting that looks ideal all the time, you've got nothing to complain about - the system works for you.