As a large, social game on one server the flow of information is constant and very useful and valuable. When someone shows up in local a quick glance gives you a lot of information. A quick web search brings up killboards. Even if they don't post their killboard the chances are the people that they fight do, so the information is there.
The in game chat channel system is flexible and fluid. Enough so, that most groups and areas have layers and layers of chat rooms just for sharing information. Information is dropped in to be gleaned and gathered by others. Just because there are no ships in a system does not mean that everyone in local is afk. In fact, often times they are not. They may be passing your information on to others ahead of you to prepare to get out of your way or ambush you.
When you are in a fleet you send someone in first to see what is there. However, that does not have to happen for people to find out by second and third hand knowledge that you are there. Once, someone wandered through a system that was rather well known and someone else, unaffiliated with them told our fleet because they wanted that person to die. That person did die, a bit later. Not that we went hunting for them in particular but I remembered, later, that someone had told us they were in the area.
Information is fluid in Eve and useful. I am continually surprised at how many people don't take a minute to look at the basic information for a player, their time in game an their corp details. The type of corp someone is in tells you a lot about them as a person, very quickly. I'm not speaking of 'good person' and 'bad person' but what their interests may be, what their fit may be like, what their experience level may be. Its not a perfect formula since people go idle and resubscribe so that their toons look very old. Also, people can buy toons in game and that creates a bit of an imbalance. It also sucks when a friend logs on and they are not actually your friend anymore because the toon was sold. That recently happened to some members of my corp.
People who have played Eve for a long time want to get rid of Local. Local is a channel in every system (except wormholes) that lists you the moment you jump in. The concept is that the jump gate logs your information and broadcasts it to a public list. In wormholes, not having jump gates, they removed it. A lot of people feel that knowing who everyone is is bad and how great it would be if there was no automatic local. You would only local up if you spoke.
I disagree. From a very, simple, player game viewpoint local lets you know other people are logged in and playing as well. If for no other reason, that appeals to players. It makes the game bigger. The feeling of being alone is a major one in a MMO. People already do not speak much in local channels. Some corps downright forbid it. I was once forbid speaking in local. Now I can and do and enjoy it. However, it has a stigma attached to it. Yet, from the viewpoint of a new character, a busy local means many players which means they are not alone which improves gameplay since we are playing a social game.
Will I lose that new player outlook? I don't particularly want to. There are enough bitter veterans running around wanting to adjust the game to what makes sense to them after playing it for years. If we let our bitter vets run everything the game would be a dark, moody place. Not everything has to make sense. Some things just improve game play for the sake of playing the game vs balancing it.