Yeah, now what?
They can't download a driver package and update. They're stuck with whatever came with the version of X in that Ubuntu release. They can't use a driver off a CD that came with the machine, because there aren't any. If X was capable of a better mode it would have used it, like the plain vesa driver with a resolution matching the LCD.
So what are they supposed to do?
It's better than getting dumped to a VT, sure, but it doesn't solve the real issue. On Windows 95 I could put in the CD, install driver.exe, reboot and presto. With Ubuntu the only option for the average user is to wait 6 months.
This feature might be useful if you like to intentionally break xorg.conf, but unless there is actually a way to get real hardware support installed, rather than seeing if you can force X into a different mode (which it should do automatically), it seems pretty useless.