Every year tournaments seem to get more expensive and give less back. As recently as a few years ago, every player got a pin and a tournament magazine. Now you are lucky to get a free parking space. That said, tournament attendence is up across the state and beyond so something else must be controlling why people go.
The first factor is probably the games themselves. General thinking in US soccer is that games are were players show the most signs of improvement. Theoretically tournaments give you 3-5 more games against teams of a similar level to you. That could be roughly equal to half of your regular season, crammed into a singled weekend. The teams are often ones you have never played against before, which increases the enjoyment and challenge for your players. Also, if you have had a losing season in a tough division, a tournament might give you the chance to win some games. Equally if you have had an easy season, a tough tournament might give your players some challenge. Getting to that ideal 6-3-1 formula of wins-losses-ties can often be helped by a strategically placed tournament.
Related to games is the increased practice you get from tournaments. Some coaches use events to try out new formations or put players in new positions. It is a chance to try things in a high pressure environment without the consequences of relegation that could come from experimenting in league games. Playing a tournament right before the start of a season could also give your team a running start when they get into their first league game.
Beyond the games themselves, tournaments offer you a great chance to work on team spirit. Traveling together, staying in the same hotel with or without their parents, going to meals and entertainment, and hanging out together can all help build social cohesion among your players. In club soccer, particularly at the highest levels, players rarely all go to the same school, so this is a good opportunity for them to find out more about each other and develop friendships. Although social cohesion is not vital to team success, it can certainly help. For more information on this, check out the teambuilding section of the website. Finally, for coaches, this might be a good opportunity to get to know team parents better and for them to see you outside of the pure soccer environment. If they can see that you are also a real (and nice) person, their trust in you as a coach will usually grow.
For elite teams, tournaments can help to improve their national and state standings, get their team recognized by the biggest tournaments, and help their players get into college. GotSoccer and other organizations have created points systems for teams taking part in their tournaments. Theoretically other tournaments can take this into account when deciding whether to accept teams into their events. This in turn might help your tryouts and recruiting of other elite players. Adding guest players from within your club and outside for these events can also help with that.