Prestige, for a lot of people, is the numerical proof of experience.
The higher it is, the less likely lower prestiged people are going to attack and plunder you. Intimidation.

Personally, I think it's a way for people to grab their junk and be all: "LOOK AT ME YOU MOTHER******"

So, I really don't see the point in crying about it being set back to zero. Just pick up your jewels and start again.