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It's caching posts from other servers so that if you have an instance with a few hundred or thousand people on it and they all open the home page you don't send out thousands of requests for each post and end up DDOSing a bunch of other servers.
I don't really understand this reasoning. Some server would still need to receive those requests at some point. Would it not be better if those requests were distributed, rather than pounded onto one server? If you have a server caching all the content for its users, then all of its users are sending all of those requests for content to that one single server. If users fetched content from their source servers, then the load would be distributed. The only real difference that I can think of is that the speed of post retreival. Even then, though, that could be flawed, as perhaps the source server is faster than one's host server.
The data does get pulled, but only if it is “old.” If you just pulled 0.5 seconds ago, you don’t even need to check.