There are many reasons. What is the first thing anyone looks at when you arrive to your unit? Yep, PT. And with the Army getting smaller, what is going to be one of the first discriminators to kick someone out? PT. When you want to get promoted or go to schools, what do they look at? PT. You get the picture.
Then, there are the health reasons. Better health translates into less sickness, more productivity, less injuries, and a happier disposition.
Finally, there is the leadership aspect. Good fitness gives you a better appearance, it helps build self confidence, it gives you credibility, it can help you to lead by example, and it allows you to raise the standard for others to follow.