I use this idiom all the time, but I hate it. Why do I use it? Well, it's better than saying to my students or other people, "you're sh@$ out of luck," or "I refuse to change my mind or the situation." It ends all arguments since someone cannot disagree and childishly say, "no it's not." It's just as bad as "let's agree to disagree."
For example, I'll have that student that will approach me with empty excuses to why he/she was unable to turn in any papers or do any of the work over the semester and has ignored all my reminders and warnings. Suddenly, this student shows up at my office at the end of the semester looking for a miracle to pass the class. I usually break it down to these students by pointing out policies in the syllabus needed to pass, then I show them mathematically the inability to pass. In desperation, most of these students refuse to see mathematical and linguistic reality. They become irrational and try to convince me that there must be a way to pass without doing the work (they don't say it in this way, but just refuse to come to terms with the reality of the situation). In the end, I resort to, "it is what it is." Only then do they seem to understand the finality of the situation and give in.
Idioms come in handy because we universally understand them. But why are they necessary to use? Surely in the above situation as a student you should be able to grasp that you won't pass if you don't do the work, period. But that doesn't seem to be enough. The idiom "It is what it is," is said to be "used when a person, place or thing is behaving in accordance with their nature, so that behavior should be accepted or expected even if it is not what you would like" (Usingenglish.com). This makes sense in the above example. The "nature" would be the students' awareness, via syllabus, of due dates, expectations, assignments etc. and the professor holding them accountable for these assignments. So in the end I suppose I'm saying to the student, "I know you don't like it but this is to be expected." It seems obvious in this situation but given the background of some students and inferior public school systems, some of these kids probably passed high school classes by handing in something at the last minute regardless of due dates, or worse even passed without doing any work. In these instances, "it is what it is" is like a bitch-slap the face. A cruel and bitter sting of how life suddenly is so unfair to them.