Tech 21 replied very quickly to my email. Great service! I'll wait for V2 before ordering. Here is the response:
Thanks for your inquiry. The speaker simulation mostly eliminates the "fizz" you get from high-gain settings of a tube amp (which the VT will emulates). When recording or playing through a PA system, instead of the "flat", lifeless tone of just a preamp, it offers a more natural mic'd cabinet tone.
I should say that it seems that guitar players are a bit more fanatical about not adding our speaker emulation (which merely adds the "focused", studio quality tone of a multiply-mic'ed cabinet) to their guitar speakers (which they may have spent a good amount of time choosing according to personal preference), before even hearing it. But we've never heard from bass players who decided they couldn't possibly use our products because the speaker emulation wasn't defeatable. There probably aren't that many different models of bass speakers to begin with, anyway. But at least the switch offers the option of using it or not. Either way, you've still got the active EQ to help you arrive at your tone.