Before the advent of IO::File, which provides an object-oriented API for accessing files, there was no alternative to using file handles. The problem with file handles come when writing (or using) modules. If a routine in a module needs to open a file, and uses FILE for the file handle, the only way to avoid smashing some other FILE is to localize the file handle using the   local *FILE; idiom. This guarantees that any other variables named FILE will be restored at the end of the routine that does the localizing.

If you're writing a simple script, there's little reason to do this yourself. If you're writing a module, the better thing to do now is use IO::File for file access.