hairy - I'm a little baffled that no one has taken a crack at this. Maybe its a bit basic for those who have grown up with Waddingtons. I fish salmon mostly in Canada - though I have been coming to Scotland in the spring, and will be again in 2009. It was in Scotland that I learned about the fly. Waddington himself theorized that by the design of the salmon's mouth it fed on relatively long, slim baitfish like squid and sandlance. The extend length of the Waddington shank allowed him to tie a long fly and locate a hook at the end of it to stop short strikers. Also, the hook to shank joint is fairly flexible - I actually use Partridge big mouth doubles connected to the shank with spectra line - and so you do not have the likelihood of your hook being pryed out of the fish as you would with a long shanked hook.
There are certain flies that really lend themselves to this design. The Willy Gunn, Allys Shrimp, and long, hairy flies like that are the ones. I think the long slim profiles are attractive to fish in high and/or cold water and produces more strikes than shorter flies.
One might ask what the benefit of the Waddington is compared to a tube, and my view would be first in the top and bottom orientation maintained by the front up eye design of the shank, and the fact that the material is tied to the shank like a regular fly. A tube can spin around and lose this orientation. Also, long tubes, especially ones of heavy material become a little unwieldly. You can extend a tube with the plastic junction tubing, but it doesn't tend to stay as straight and that can cause twists when in the current.