Supposedly, it is to hone your clinical and organizational skills, and then move on if desired.
However, when a student wants NICU or Peds, honing all those Med-surg skills means it will take longer to UNlearn them when the graduate gets to where s/he REALLY want to be. IMHO, that's a big mistake, because premies, babies, and children are NOT adults, they have immature organ systems, they evidence disease in different and more subtle ways, they 'process' medications differently, and they often have very different social and developmental issues. NICUs and PEDs want them as new grads, and often have extensive orientation and mentoring programs. Way to go!
I'd be willing to bet that the practice originated in hospital Schools
of Nursing trying to staff MedSurg floors w/new grads. When there was less variety in Nursing, it might have been a good thing. Now, with increased specialization, I think you could evaluate where the student thinks s/he ultimately wants to be. If they want to do adult ICU, a year in M/S won't hurt.