Guosong Shao (2009) has some interesting thoughts on this. The researcher suggests that UGC allows individuals to fulfill the following three groups of needs: (1) Self-expression and self-actualization; (2) social interaction and community development; (3) information and entertainment. This seems to me like a solid explanation for a large chunk of the UGC's appeal (see my related post).
Here's a neat graph from the paper (p. 15), illustrating the psychological mechanisms the author is proposing:
APA citation: Shao, G. (2009). Understanding the appeal of user-generated media: A uses and gratification perspective. Internet Research, 19(1), 7-25.