It was essentially a digital research facility. As per the Tron Wiki:
the Grid was made to provide an experimental platform where all forms of research could be carried out at unparalleled speeds. Perceived time on the Grid is measured in cycles and run at a pace far greater than time perceived in the real world, thus allowing anyone immersed in the computer environment to perform the same functions in a fraction of the time it would take them otherwise.
So the idea was that Flynn could digitize himself and others in to the Grid and perform experiments at a much faster pace in the real world. People in the Grid age at the same rate as the real world, but they experience time at a much, much faster pace. So in theory, research that takes years would only take hours or days.
This of course did not work out so well, but this was the intent.