Update: In Mac OS X 10.10 Yosemite and later, it seems the zoom button has been replaced by the fullscreen button. The green widget no longer contains a plus sign, but two outward-pointing arrows, and places the window in fullscreen mode. To zoom a window, you now option-click this button.
The green button isn't for maximizing. If you want to maximize, use the "fullscreen" button in the upper right of the window:
The zoom button is intended to make the window the best possible size that shows the most of the window's content. This is the most useful when working with multiple windows, because you see as much as your screen will hold, but it still leaves enough room in which you can position other windows. (E.g. I often have a Twitter client or chat program open on the right hand side next to the browser)
This feature is especially useful in very old (like the Finder in System 7) or very new applications (i.e. ones that support state restoration) because those will reliably remember the previous position where you put a window. So when you restart your Mac, your Safari window will open beside the chat window, and your setup will be just the way you left it.
Many applications written in the interval between those two eras will just open a window in the upper left, then keep stacking new windows down and to the right, overlapping that window, and give it a default size. That, of course, defeats the advantage of a reliable position for multiple windows to let you arrange your windows onscreen to optimally fit your content.
For comparison, imagine your desk: you can place sheets of paper on it, all have different sizes, maybe different colors, and they can overlap. Since the human mind is optimized for the physical world, you can jog your memory about which sheet it is, just by seeing the corner or an edge (and thus a hint at its size), its thickness and maybe its color, and a hint of whatever's written on it.
Applications that don't remember the position are like when Mrs. Hudson goes through Sherlock Holmes's apartment every morning, dusting off everything and neatly stacking stuff. It is no longer in the position he remembers from last night, and as they're all stacked on top of each other, you can't see it peek out to judge its size, color or content either. Zooming is optimized to support that workflow, make window sizes more unique.
The problem with web browsers is that they use one window for different content, and don't remember window sizes. Thus, the only way to use them without going mad is to make them the size of the screen. Otherwise you'd have to manually resize them every time.