I've heard a lot of theories about that over the years and I'm a believer in it through experience. I think the biggest thing that it does for you is allows you to keep some leach tension on the main, and subsequently the draft of the main in a better position, without hooking the main. Without the downhaul, if you sheeted tightly enough to help the draft form properly in the sail, you would have a hook in the top of the main which points the driving forces aft of the lateral resistance of the hulls through the water...meaning; the top of the sail is trying to sail the boat in reverse while the bottom is trying to sail forward...and that's not fast.
that's my interpretation...so take it with that value.
I once raced a Hobie wave with a badly shaped main and it would hook if I put much sheet tension on it at all (the downhaul on that borrowed boat was not functioning well...it would have helped). If I sheeted one click too far, I could feel the drive in the sail evaporate. The effect of the hook was pretty dramatic.