Okay, I'll bite.
1. The pistol grip changes the way a rifleman holds the weapon. Without it, the stock rests on the palm, appealing more to the sportsman or hunter who will line the sights up to his eyes. With it, the weapon is more easily held at the waist, a stance used more often by soldiers. Hence its status as an identifier of assault weapons.
2. Yes, let's face it - they're scarier looking. I'm sure there are many gun control advocates that would ban all of Grandpop's hunting rifles with the maple wood stock, if given the chance, but they can only get the largely apathetic general public to get excited about the sleek black ones.