There is next to no knockback, correct, but what little knockback there is moves the opponent in the upward/forward direction. Because of slow fall speed, floaties will stay more or less where they are in midair as you fall to the ground. Fastfallers can be counted on to move to the ground at more or less the same speed as you and therefore can land inside your pitiful grab range. This is why fair leads into something like a dsmash for a floaty a lot more easily than it does grabs, although the stuntime is pretty crappy all around so it may be risky to go for it when it isn't a sure thing.