I think in context of a 4 player platform game that an auto-mode makes sense - it means someone can drop out for a few minutes and then join in later when it suits without spoiling it for everyone else who would normally have to pause the game and wait.

You shouldn't get credit for anything done while in auto-mode though (e.g. coins or power-ups gathered etc.) and if the AI isn't perfect (or scripted) then it all adds to the fun that an absentee player is taking on a certain amount of risk by opting out for a while.

I really don't see the point of having it in single player mode.

The concept isn't new - it is in the Lego Star Wars games.