In RTCA DO-260B, what were the reasons GVA was added ? Is it a replacement for something?
The philosophy behind the the quality indicators is that the ADS-B transmitting system sends the data it has, as well as information about the quality of that data. The receiving systems can then decide, based on the quality indicators, whether the data is good enough for their intended application. 

The reason that more find grained quality indicators were developed in subsequent ADS-B versions had mainly to do with two factors:


new insights in the type of ADS-B applications were being developed
better performance and quality information delivered by GPS receivers


Note: at the time of DO-260 development, GPS had Selective Availability (SA) still turned on. This deliberately degraded the accuracy of the civilian GPS signal. This meant that both in the horizontal and the vertical plane the accuracy was very poor compared to current levels. 

The big difference between version 0 (DO-260) and version 1 (DO-260A) was the split between accuracy (95% error under nominal conditions) and integrity (protection against non-nominal performance). 

DO-260B then split the quality indicators between the horizontal and vertical component (hence the introduction of Geometric Vertical Accuracy (GVA)), added a finer grained resolution to horizontal position integrity and distinguished between between measurement integrity and avionics faults (the concept of system design assurance (SDA)).

GVA is intended for ADS-B applications that depend on the accuracy of the geometric vertical position. One such application is RVSM compliance monitoring using ADS-B. They compare the reported flight level to the geometric height from ADS-B, using an meteo model to compensate for the non-standard pressure distribution in the atmosphere. GVA helps to assess whether a potential mismatch between geometric and pressure altitude is caused by the baro altitude system, the meteo model or the GPS receiver. 



The representation in your question shows a cylinder with hard boundaries to represent HFOM and VFOM. Whilst the numbers indeed define clear boundaries, it is important to understand that these are the statistical 95% level of the position errors, as estimated by the GPS receiver. This means that 


position errors may occur that are outside of the cylinder (5% of the cases, if the estimate is correct)
the estimate may be (and usually is) wrong. Receivers tend to be conservative in estimating the position error magnitude.




Disclosure: I was involved in the international combined Working Group 51 / Special Committee 186 that wrote the ADS-B standards, however I joined at the time when the work on DO-260B was almost finished. At this moment I not involved anymore in ADS-B standardisation and implementation.