Hinged LCD panels are very important to a few kinds of photography - discreet street/cafe work, and PJ spring to mind.
Watching a lot of politics lately, I see a lot of photographers holding their cameras high overhead to try to get a shot of the luminary separated by more fortunately positioned shooters or security personnel. Such people could benefit from using a hinged LCD rather than trusting their camera aiming skills perhaps. If the hinges were to be broken in rough handling or accidents, surely a PJ would simply have it replaced. I would too.
I find myself using the hinged LCD at the first setting at least for shy subjects, and once you get the orientation right it really works rather well. The Sony implementation has the LCD showing all the EVF features which also helps - histo/level in particular.
For more contempative work - tripod especially - the other configurations will surely be a great help, as the setup has hinges that can be turned to almost any angle. It can beat lying prone in the dirt, something I do using a 21mm for handheld up-shooting.
The RX1 users frequently express a wish for two things: a built-in EVF and a hinged LCD. The a99 has both, so Sony should listen to them and fix it next RX model release.
The other camera with this sensor - the Nikon D600 - has an LCD screen that is integral to the back panel; if it gets damaged you need a new camera back panel. Just to put it in perspective.
I feel that Sony was right to include this useful feature, and trust users to exercise discretion about when/how to use it. I am certain that the ability to park the LCD facing into the camera back is a wonderful idea, as it means you use the LCD on a needs basis only, at other times it is snuggled away safely, away from what I see as a much greater danger - casual knocking around damaging the vulnerable and fragile LCD surface.