SH pikmin toss is a common Olimar tactic that is used at mid-range. Its uses vary from matchup to matchup; against DDD, for instance, it is the main damage racking tool, where as against other characters (Fox comes to mind, that may just be me though) it is best used to elicit an approach, which you can then punish.
Like I mentioned, it is a mid-range tactic. Long-range places you too far away for the pikmin to connect while short-range places you close enough to have your SH punished. There are also certain characters against which SH pikmin toss is almost always a terrible idea; Samus, for instance, can easily Zair you once you leave the ground, and Metaknight can dash in for a punish nearly on reaction alone. For these characters, it is usually best to remain grounded and throw pikmin from there. (Note that pikmin toss can also vary in its uses here as well - it would be a damage racking tool against Samus whereas it is only a tool to force an approach against Meta Knight.)
SH purple pikmin toss can also aid in low percentage grab followups.
