it does make sense in that you can i.e. control application X in the 
foreground, but quickly go to the iTunes menu, its Music Library and 
select a different song for playback without having to activate / 
deactivate the Behaviour for that other application X.

I'm not sure, whether that is a much needed functionality, though.

The "Hide menu" item in fact is the same item as "Activate Behaviour" 
and "Deactivate Behaviour". It's the item that has the remote control 
mapping associated with it and gives you feedback about the status of 
the currently active Behaviour:

1) is it active, regardless of which app is in front (=> it will 
allow / require you to explicitly "Deactivate Behaviour") 
2) was it automatically selected / made active by Remote Buddy and 
will it be overriden by the next frontmost app (=> "Hide menu") 
3) is it currently inactive, but can be activated (=> "Activate 
Behaviour")

So, in fact, it's absolutely necessary for various reasons :-)

The reason why Quit / Activate & Co are at the bottom are this:

1) You can easily reach for those by pressing "up" when you are 
already on top of the menu (on that infamous entry ;-). 
2) Often there's functionality available for an application that 
you'll use more frequent (think "Music Library" or "Recent 
documents") and it would become pretty annoying to have to scroll 
over Quit / Activate & Co. before every time to access or even see 
that functionality.

Best regards, 
Felix