My uncle who's a fireman said that they do it to flush the system, and make sure they are working properly. Cause in the fall and winter the water is sitting still, and this keeps them working. They also often work off the same pipes that your drinking water comes from so it helps to flush and clean that out as well. Usually done in the spring. I know hot days in the summer in the city they crack them and let the kids play in them.
The hydrants are actually owned by the water utility. The hydrants are opened in order to remove sediment sitting in the distribution lines - this is commonly called "hydrant flushing".
When I worked for the water utilities, our distribution staff would routinely flush the hydrants.
Pipes if broken or cracked can have "back flow" or residue pouring into the distribution grid. Back flow prevention for homeowners and businesses are now mandatory in most locations in the United States.
Additionally, the pipes within your home also can harbor corrosive piping. IF you install a whole house filter, in reality, you should also change your home's plumbing. This is why a POU - point of use filter is best because it ensures the water you are drinking is direct to you without any corrosion interfering in the transmission pipe lines.