Yes, they pretty much are magic, for applications that benefit from them. For example, no general-purpose CPU can capture RF data directly from an ADC at multiple gigabytes per second, decimate it, and break it into 1024+ channels in real time. Any general-purpose CPU that could do that would be hopelessly uncompetitive in the marketplace.
How Intel benefits from owning an FPGA company, I'll confess I don't know. Altera must have some awfully valuable IP that Intel needs.
It's like I said: FPGA's are awesome accelerators for all kinds of things, datacenters are already using SOC's doing cores + hard blocks (see Cavium Octeon III), and Intel can possibly capitalize by adding FPGA tech to server CPU's. On top of it, they need years of investment into EDA to make it usable. What Altera already did for them.
With FPGA on-chip, you can offload intensive computations to semi-custom blocks. I/O processing, compression, crypto, fast transactions, data mining, you name it.
How Intel benefits from owning an FPGA company, I'll confess I don't know. Altera must have some awfully valuable IP that Intel needs.