The last I heard was also that dirt would simply disappear, like in Wurm. I'm glad to hear that leaving it in is still being considered.
One factor having it in would be good for is in battlefield mechanics. There's a lot of ways simple dirt can be useful. If you know you're going to need to retreat after a protracted battle, you might use the rest period between assaults to fill in your trenches so the enemy can't use them against you. In a battle with elevated ground, digging out a large quantity of dirt and dumping it into a canyon to trap an enemy force between a wall and your soldiers, or drop it on top of the force itself to wipe out a good portion of it and render their equipment nearly impossible to reclaim upon respawn without defeating your army.
Terraforming is also an area of interest. While mines and player-made holes are the bigger issue that comes to mind - anyone who's played on a large multiplayer Minecraft server knows what they start to look like after a month or two - there's also the issue that landfill would look a lot better if it could be topped with dirt and smoothed over. This also allows greening of areas that might otherwise not be able to host plant life, or the filling of small channels to render a difficult-to-traverse area easier to pave and travel.
But above all... I feel that if you're digging, people should know. Anyone carting off massive amounts of dirt will rouse suspicion, and anyone taking note will know there's something of interest going on unless they're being very careful in how they dispose of it.