As for in-game I already decided my views in the newer thread so if you start flaming without reading that...your fault.
While feces is often only used for fertilizer, Urine is extremely useful for many different things.
http://en.wikipedia.org/wiki/Urine
"My views" mostly revolve around the usage of water, making water a powerful entity in-game. If water gets polluted, you need fresh water, so sites with access to clean water are much more valuable and probably a common warzone because of water.
Although the idea is neat, it would make the game insanely hard(er) though, so I'd prefer waste to be optional by all means. (plus it would limit the entire game to a very limited number of sites. What's the use of making a full world if you can only use 1/2 site types?)
EDIT: Whoops skipped a whole paragraph, don't ask:
About the usage of urine, yeah, I am aware of its usage, but since the emphasis is on the solid side of waste, I never really thought about it. Personally I think it's got more potential uses and it's nowhere as gross.
I have actually used medicines based on urea. Possibly many here have without knowing.
But about solid waste I still can't really see its real use other than leaving your fort like an early PS3 game.
Actually if all body waste in DF was going to be urine (quite fit for them drunken dorfs) I'd totally let go of the prudish POV. It's considerably less un-epic.