Smart Contracts allow users to extend the business logic of blockchains. Just the transfer of bitcoin and ether might only help with a subset of financial use cases and cryptocurrencies.
For blockchains to be useful in more scenarios, they should be able to execute any kind of business logic and not just transfer of cryptocurrency. This is exactly what smart contracts provide — execution of any kind of business logic on the chain.
Episode 10 - What are Smart Contracts?