Perhaps, and in a substantial majority of cases, allowing users to moderate their own threads is unwise.
However there are a few cases where it's appropriate.
Roleplay forums could use it for example to allow GMs to moderate their own campaign threads. In most RP systems I know of the GM is pretty much God. Letting them manage their campaigns without hassling one of the mods every time a user gets out of line would boost efficiency. Many RP sites, due to a lack of this feature, have to dedicate mod time to enforcing membership dicta by the GMs, and in one case an RP forum was evicted to another site completely by the admins due to supervision problems that could have been avoided by allowing GMs to moderate their own RPs. And fancily enough, the forum in question was a phpBB one.
Also, marketplaces featuring auction threads could use it to allow users to moderate their own listings by deleting unapproved posts. In this case, being able to separately manage deletion versus editing is useful.
I would consider RP and market forums substantial enough use cases to make this feature worthwhile. SMF already has it as well.
WRT your comment about "framing" other users for flames, the tell-tale "edited by" signature that would generate would cause the joe job to fail and blow up in the user's face.
Naturally of course this feature would be a permission setting under the discretion and control of an admin who presumably knows what he is doing.
As it is, allowing users to delete their own topics is already a feature.