It's a typewriter-based convention, and is suitable for monowidth fonts only.
It's a beastly practice held over from the time when it was useful (that is, when typesetters set the type from the typescript), and I wouldn't use it in monowidth typesetting either.
I am rereading the Lord of the Rings, and have noticed that my copy, which I have had since I was 14, was typeset with double spacing between the sentences. I am considering buying a new copy, much as I love my old ones....
--
Michael Everson * * Everson Typography * * http://www.evertype.com
