It helps against passive observers. This might not be very important over wired, but on WPA-PSK setups, knowing the network password allows you to eavesdrop on communications by any of the computers.
Why would an attacker in your intranet who's looking at your network traffic be passive? When people talk about passive attackers they're talking about the NSA/ your ISP, not someone who's hands-on-keyboard sniffing traffic.
There's virtually no reason to do encryption without authentication in your intranet.
