It allows the umpires to see the pitcher's feet touching the rubber pad. Because it is raised, the pitcher has the advantage of pitching down at the batters.

Speculation is that they evolved as a matter of groundskeeping practice, for better drainage and water absorption. After overhand pitching was legislated in 1884, pitchers undoubtedly found the mounds to be an advantage: the downward weight-shift and momentum enable them to generate greater velocity on their pitches. John Montgomery Ward, who pitched in the major leagues 1878-84, supposedly took credit in later years for the innovation of the pitchers' mound." http://experts.about.com/q/Baseball-Trivia-General-2552/Pitcher-mound.htm http://longgandhi.com/faq.html

If it wasn't raised, they couldn't call it a mound :-) Seriously though, below is an excerpt from Cecil of The Straight Dope. The best way to understand the purpose of the mound is to imagine the situation greatly exaggerated: picture yourself trying to hit a fastball thrown at you from ten feet in the air. The angle of the ball's path (and, I suppose, the force of gravity, to some imperceptible extent) would make the task more difficult than it would be if the pitcher were standing level with you. In short, the height gives the pitcher an advantage. Over the years, baseball men have tinkered with this and other variables in order to fine tune the delicate balance between pitching and batting. Thus in 1879, it took nine balls (i.e., nonstrikes) to draw a walk; before 1887, the batter had the right to demand a high or low pitch; the distance from pitcher's plate to home plate was increased from 45 to 50 feet in 1881, and again to 60 feet, 6 inches in 1893. The mound first shows up in the rules of 1903. In 1963, to adjust for a perceived pitcher's advantage, its height was changed from 15 inches to 10. The rules also give specifications for such things as the size of the pitcher's plate, or "rubber" (24 by 6 inches), the radius of the circle (nine feet), and the frontal slope (one inch per foot over a specified range). Though these specs appear in the official rules under the dubious heading "Suggested Layout," they are considered law. Various other aspects of mound construction are left up to the imagination, if any, of individual team owners. http://www.straightdope.com/classics/a1_302a.html