Why use FTP on a Lan? Simple: flow control. For instance, I have a client that has 2 DNS-323s setup in their company: 1 for archiving, and 1 for active data (current data). Neither box is directly accessed by their users as they have a server for this purpose. Their server does a synchronized backup of data to the "current" DNS twice a day for both user and database files (btw, this is their setup, and not the way I would do things, so please, no comments on this).
So, lets say you do a direct copy to that DNS over the Lan. What happens? It will do so at the full bandwidth of the connection, and in this case tying up the entire bandwidth to the server. At night they don't care, but during the day? Hell no. This is where FTP comes in. By using FTP we can set the flow control to something more manageable. Something that won't interfere with users access to the server.
Edit: also, while this is something STILL not implemented in the DNS-323 (and something we've been bugging D-Link for ever since the box came out, btw), logging is another reason for using FTP. You don't get that with straight file copying.