The theory would be that certain formations work better for certain types of offenses - Wishbone/ND Box for Running, I/Pro for Balanced, and Trips/Shotgun for passing. I'm not positive it actually works that way in practice though.
I think most people choose the balanced formations for recruiting purposes. There is a finite number of roughly similarly skilled players available at each position. So if you only need to recruit 1 RB, 1 WR, 1 TE, you can do so relatively inexpensively and save your money for those OL, DL and DBs that cost a ton. However if you are running wishbone and need to recruit 2-3 RB's you'd have to spend more or risk not having enough depth. Or maybe it's just because the other formations aren't as effective, I haven't tried them in a while.