I also used to believe that the tassles or scarves serve no usefull purpose. This is what the Wu family taught me and so why would I have believed otherwise?
However, I have since had a very graphic demonstration of what at least some of their martial purposes are as used in the Yang style, and am now a believer in this new maxim:
Whatever works for you, that's what's correct.
I didn't used to like having a tassel on my Gim, to be honest I thought it was very silly. I trained the Wu style Gim form this way, long, long ago (don't even recall all the forms, that's how long ago it was). However I didn't keep up my Gim practice, because my Wu style Gim instructor told me, correctly I may add, that I was much better off training the broadsword forms at that time. I had a very heavy hand at that time, about thirteen years ago, and found a true love for the Wu style broadsword forms, I took my first lessons under the direction of Wu Tai Sin at a seminar, that I have never really lost.
My heavy hand kept me from really experiencing the complexities of the Gim, but worked out quite well on the broadsword forms. So that's what I stuck with.
Now, I am beginning to train the Gim, or what they call "sword" form of the Yang family. I am hoping to really give myself a jump start and attend the seminar with Master Yang Jun next week in Louisville, but don't know if I can get the time off of work yet. Anyway, I have started some rudimentary training with my Yang Cheng Fu instructor, and he has taught me a thing or two about that tassle that really opened my eyes to it's uses.
Yes, it would indeed make a fine handle to pull the sword out of an opponent if it got stuck there. But that's not the primary use I know of.
As Audi said, it does help in learning the movement of the sword. If you do it wrong, the tassle will wrap around your wrist, or just flop uselessly around.
However, if you do it right, the tassle lets you know that right away by it's motion. Instant feedback to correct movement. A wonderful, wonderful training tool all by itself.
Beyond that, it completely distracts an opponent when it flashes across their eyes, blinding them and causing them to loose reaction time for that split second before your blade makes contact.
Also, you can put razors or hooks in the tassle to use as weapons against your opponent that they will not see. I wouldn't recommend that for a beginner who isn't familiar with the movement of the sword, however. Imagine getting those razors or hooks wrapped around your own wrist!!!!
Again: Whatever works for you, that's what's correct.
I have also seen the high ranking Wu family members and disciples use thier Gims with absolutely no problems because they don't have a tassle.
So it's obviously not necessary.
Again, though, a usefull tool if it works for you.