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This database was built using data from BEFORE Google required active ad accounts to get good keyword data & before they started blending data together for similar terms. Even if you set up an AdWords account and spend significant sums of money with them, they may require you to run your ad campaign for 3 or 4 months straight before they will show reasonably precise data instead of exceptionally broad data ranges.
This tool was originally created to carry out keyword research for paid campaigns using Google's AdWords platform. However, it can also be used to research organic keywords, providing estimated global/local monthly search volumes for keywords (i.e. their popularity) and their competition (i.e. how difficult they are to rank for) for organic search.
Once I have a list of phrases, rankings, and volumes from these tools, I'll look to internal tools (maybe Excel, Access, or another database) to organize, classify, and forecast opportunity. This is where I'll estimate a competitor's traffic based on volume & position CTR, set goals for a target position, and estimate traffic based off that position's CTR and keyword volume.
I just have the free version right now so I don't know all that the pro one can do. But even the free version has A LOT of tools you can use, I haven't even figured them all out yet. But one that I have used is their Content Optimizer. You can take a new or existing content piece of yours, and compare it to one of your competitor's pieces on a similar topic, and see where you might be lacking based on the keywords that are used in each piece.
As for the history of the company, as I explained, I created Long Tail Pro back in 2011. At the time, I was creating tons of niche sites and was doing alot of keyword research and content creation. I was trying to figure out what types of keywords would rank quickly in the search engines, specifically Google, and I was frustrated with the other keyword research tools (in particular Market Samurai) out there.