It must be for utility in the hot, dry, sandy desert. After all, don't Americans wear the same thing in our southwest? Cowboys wear cowboy keffiyehs and Indians wear feather keffiyehs. Sheriffs wear keffiyehs with badges on them and mailmen wear keffiyehs with the postal eagle insignia.
Everybody all over the world living in hot dry deserts wears long enveloping robes like the Australians -- in the Dreamtime, they use their jelabas as Blankets.
It's a cultural trait of the Arab/Muslim peoples. It is appropriate in many ways to the environment many of them inhabit, but inappropriate for many others. It is also reinforced by the extreme body modesty of many but certainly not all Muslim peoples.
And for those of us whom the Arab/Muslim establishment has designated as disposable subhumans, it is a symbol of their genocidal bigotry.