Unfortunately, much like the Groin Attack, this trope is played for laughs so often and by itself is so absurd that it's nearly impossible to take seriously when played for drama. Most often this trope is used for comedic purposes, but there are a few serious examples as well. The reasons for using this trope vary, including robbing a particular character of their dignity, as a joke on the extent of their cowardice, or occasionally in an attempt to show just how frightening something is. This is when somebody's response to a scare is to piss or crap their pants, though this may not always be shown. Encounters with these things can weaken not only the resolve of the strongest, but their bladders and sphincters as well.
With all the monsters, world destroying psychopaths, and clowns out there, the world can be a pretty frightening place.