Prestige mode has a number of benefits:
- You get a Prestige Unlock Token, which permanently unlocks an item of your choice.
- You get a Prestige Award, which you can use to get an extra custom class, get an unlock token "refund," or reset your stats completely.
- You get a new rank icon, which indicates the number of times you've prestiged.
- The first time you prestige, you get an achievement/trophy for doing so.
Also, in Black Ops 2, your weapon levels are tracked independently of your rank, so you will retain things like attachments and camo across prestiges. (However, without the use of the Prestige Unlock Token, you'll still need to rank up to unlock it again. Also, confusingly, weapons can Prestige as well...)
Of course, as you've noticed, the problem is that you wipe out your rank. You'll have to start again from rank 1 and work your way back up to rank 55 again. This can be good and bad - some people like earning XP, and the game isn't as "fun" when they aren't ranking up.
Mostly, though, Prestige Mode is about prestige. Bragging rights, bling, etc. It's saying to the world "I have a lot of experience playing this game." If that's not interesting to you, then you can safely steer clear of Prestige Mode, and stay at rank 55 with no penalties.