> What's the utility of this?

Constant memory usage. It uses a small amount of additional memory (tracking the current pixel, pixel value, and a couple temp variables used for calculations) over the image itself making it a very low overhead algorithm. You can basically get away with 5 more variables, 20 more bytes if they're all 4-byte values, using this approach compared to the much greater memory needs of a stack-based approach (either a stack data structure or recursive). And actually just 4 variables since the D and P variables don't overlap in lifetime.

EDIT: Light editing of the above for grammar and clarity.