The benefit of having it on a 'separate desktop' is it allows for better application management. For instance, I can have Safari, iTunes and other applications all on their own desktop, which means I can then swipe back and forth on the trackpad or mouse (CTRL+left/right) to access different applications. It's a very intuitive and quick way of managing open applications, in my opinion.
Anyway, what you've recommended is similar to what I am doing. I am essentially pressing ALT+ENTER to alternate between full screen and windowed. Does the job, but not as simple as the above.