Advantages of Android Full-Disk Encryption
The advantages are limited, but there are nonetheless scenarios where encryption helps.
In any scenario where the attacker obtains the password¹ (with lead pipe cryptography, or far more realistically by reading the unlock pattern on the screen or brute force on the PIN), there is clearly no advantage to full disk encryption. So how could the attacker obtain the data without obtaining the password?
The attacker might use a software vulnerability to bypass the login screen. A buffer overflow in adbd, say.
The attacker may be able to access the built-in flash memory without booting the device. Perhaps through a software attack (can the device be tricked into booting from the SD card? Is a debug port left open?); perhaps through a hardware attack (you postulate a thief with a lead pipe, I postulate a thief with a soldering iron).
Another use case for full-disk encryption is when the attacker does not have the password yet. The password serves to unlock a unique key which can’t be brute-forced. If the thief unwittingly lets the device connect to the network before unlocking it, and you have noticed the theft, you may be able to trigger a fast remote wipe — just wipe the key, no need to wipe the whole device. (I know this feature exists on recent iPhones and Blackberries; presumably it also exists or will soon exist on Android devices with full-disk encryption.)
If you’re paranoid, you might even trigger a key wipe after too many authencation failures. If that was you fumbling, you’d just restore the key from backup (you back up your key, right? That’s availability 101). But the thief is a lot less likely to have access to your backup than to your phone.
¹ Password, passphrase, PIN, passgesture, whatever.