The main reason is ease of use. Of course, you can use JSFiddle to create an HTML page with a textarea field and a button that triggers your code and outputs the result to the console or somewhere else. But that's a lot of overhead for a simple text editing task.
TxtFiddle is specifically built for text manipulation tasks and reduces the amount of code you have to write to a minimum. There's also a (growing) list of templates that you can choose from (see the "New" menu). Another differentiating feature is the ability to abort a running script (i.e., in the case of an accidental infinite loop).
