The GTS is a huge resource for those without traders. And DNS cannot be blocked as it can easily be changed. Only removing the Auto-Detect DNS from every 3DS, DSi, DS and Lite will stop it but if a server goes down, sometimes they'll ask you to redirect the server to use the service, hence its inclusion even today. Because people know this, you have tools like PokeGTS that give you free access to give pokemon anything you desire. But Like a Yin-Yang. You also have beneficial tools like Pokecheck, which has a Legit Checker which is useful when getting pokemon from the GTS. (I lost Reshiram when someone gave me a Hax Shiny Bellossom there, I was lucky to have it returned to me funnily enough)
As for what the GTS does outside DNS, yeah, people asking for lv.9 or under pokemon needs to go. They need to use some sort of "minimal level databank" containing the lowest level of all available pokemon in game. It blocks underleveled pokemon being sent to them, but not posting such an impossible request.