...just for historical reasons.
It is absolutely awesome to have when you simply need to run some old program, which is in my case usually bound to some piece of old, but still useful HW, like chip programmer, some old measurement or CNC equipment etc. Or perhaps for analysis of program behaviour in order to do modern reimplementation. Or to enjoy nostalgia trip with some old DOS game...
WRT to FreeDOs development, I don't think it's needed outside integration into modern OS & HW, like having modern drivers for mouse and optical unit, USB useage for printing, nice, antialiased fonts, good high, EMS etc memory manager etc. I/O virtualisation of some sort would be great, so I can, for example have virtual LPT port that would be seen on desired I/O port address and connected to some real LPT port somewhere entirely else or even to USB driver or some userland program through pipe etc.
I don't think susbtantial, grand scale reworks like 32-bit and 64-bit implementation, multicore and multitasking are neccessary. We have plenty other solutions for that.