I have purposely designed grass bunkers. Of course (Tommy N, cover your eyes!) when I do so, I always place a catch basin in the bottom so they remain grass and not mud bunkers. Drainage is essential.
I use them for:
Variety - on the theory that liberally and seemingly randomly (but actually generally trying to balance left, right, back, front, etc.) sprinkling different hazard types on various sides of greens, fw, etc. will over time cause a repeat player a bunch of different recovery shots, rather than repetitive sand shots
Speed of play - (front right, esp. on an opening hole) rather than sand, and where sand visibility wouldn't be so good or attractive, but the shadow patterns on grass bunkers could be attractive, or where the dark slopes would actually highlight the adjacent green.
Equalizers - Good player love sand, poor players hate it. Good players hate grass bunkers, but poor players prefer it. In many ways, using grass bunkers seems like a match made in heaven!
Maintenance - Courses everywhere are taking out ever more expensive sand bunkers, just as they have in every recession or depression this country has faced. As bunker maintenance costs go up due to unrealistic expectations, this should increase. So, why not learn from the past and design fewer bunkers. Its not like they are natural in too many locations in the US anyway!