Why would I want to turn on iTunes Match on an iOS device?
I agree that they make it confusing in their advertising. I think part of the problem is that they have blurred the lines quite a bit recently, leaving one key difference: music purchased with iTunes vs. that purchased elsewhere. iTunes Match uploads your music and puts it on all of your devices regardless of where you purchased it, while iTunes on iCloud just does that with music you purchased from iTunes.

For example, I have a number of songs that I purchased from Amazon, and they consequently don't sync to my iPhone even though they are on my computer. This would apply to music ripped from CDs as well.