Why would someone configure FTP to use interface Loop back within a routers configuration?
the loopback interface is a logical interface that is always up/up if the device is alive.
The loopback interface has to be advsertised and this is the only drawback.
Using a loopback interface is so the better way to make the device to use the same Source IP address in accessing services like an FTP server and so on like for example a Radius or Tacacs+ server.
So when reviewing activity logs you can always be sure that IP 10.1.1.1 means that specific router and not another one.
Loopback interfaces are also very important in networking for example for internal BGP and MPLS and all MPLS based services.
Without setting those source commands the router would use the interface in the path to the destination, that can change for different destinations and can change over time if the primary interface goes down.
Hope to help
So from what i'm gathering in your post, Loopback interfaces are used
As they are always active (up/up)
It can use its self as the source for FTP/Tacacs+ and other services
Ease of verifying its self as the source within logs
Am I correct?