"Nonprofits are required to publish this data for good reason: their exclusion from various tax liabilities amounts to a huge subsidy from government to all kinds of activity (each dollar's worth of uncollected taxes is a dollar that has to be borrowed or collected from someone else). This subsidy will add up to around $60 billion in 2013 alone, according to government estimates (you can see this breakdown courtesy of the Pew Tax Expenditure Database by looking here, here and here). 990 data helps to ensure that the system isn't being abused.
The IRS currently publishes -- and Public.Resource.Org redistributes -- 990 data as PDFs. But the IRS has been modernizing its systems and rules, and big nonprofits are now required to file electronically. Many smaller nonprofits do, too; after all, it's more efficient.
But so far the IRS won't publish the e-file data. Instead they give us PDFs, forcing those who want to work with 990 data to spend time and money re-digitizing information that already exists as well-structured, machine-readable data. "Here's a letter, linked in The Sunlight Foundation post, from Carl Malamud, explaining why these data need to be made public in a useful fashion. While I have interests in these data sets that go far beyond fraud identification and prevention, I certainly agree that this is a valid reason to promote transparency.
The letter cites innovation, fraud prevention, easing regulators burdens, and the public's right to these data as reasons the IRS should act. I have another reason, appealing to American patriotism and pride. That is to say, the Canadians do it, shouldn't we?
Montreal is home to Ajah.ca - a Canadian company that turns both federal AND provincial open data on charities, government contracts, and foundation funding into a one-stop source for fundraising information can help you see more reasons to open these data. To an American, a first glance at the data on Ajah looks like the result of a Guidestar/Foundation Center mashup. The more you dig the more you realize these data are gathered much more efficiently (they're more up-to-date than 990 data - citations even include "made on" dates). Ajah includes government funding and corporate giving as well as philanthropic grants in ONE place, you can "profile" your charity and benchmark it by funding sources, look for recommended funders who've funded organizations like yours, and it is revenue self-sustaining (the costs of input are much lower than they are here, since the data are electronic to begin with and share formatting). I'm simply a fan of the potential practical utility of the information.
Ultimately, I'm most interested in electronic, open, machine readable 990 as a foundational brick in a new digital infrastructure for sharing information about the social economy, making progress on shared problems, and catalyzing new ways of working together. Here's to all the efforts that are trying to get us there.