As far as I know, it's because some URLs become really long (especially any URLs that are generated on the fly by the site and/or have query terms in them) and shortening the URL is a way to prevent those URLs from taking up lots of space, especially as it can look ugly around the surrounding text. Most forums these days do this.
Cutting the middle is probably going by the assumption that with the beginning and the ending you can sorta figure out where it points to most of the time.
Don't pay much attention to "the hedgehog" in my nick, it's just because "Sik" was already taken =/ By the way, Sik is pronounced like seek, not like sick.