What is the reason behind ticket reservation for schengen Visa? I'm confused because I want to book tickets directly from air line , everyone knows those booking are cancelled after 24-48 hours so mostly likely will be cancelled a day or so after I submit my document. Travel agencies are asking for money to book ticket that will last about 3 weeks, how true is this . And is that what the embassy needs to confirm, that I have a reservation Is it to confirm the price of ticket and compare with my bank statement to determine if I can afford it.
Note first that the actual Schengen rules -- that it, such things as the Visa Code or the consular handbook -- do not define any requirement for including a ticket reservation in a visa application. So if someone tells you that this is a generic requirement for all Schengen visas, they're misinformed and you should be cautious of trusting anything else they say about the visa process.
It seems that some consulates do require this, though, more or less formally. The Schengen rules are written in very generic language -- they just say each consulate should convince itself in any which way that the applicant is not an immigration risk. It is up to them to define what they'll be convinced by. (Each member state had its own rules and procedures for issuing visas before Schengen, and the rules were written to let the various national bureaucracies continue with "business as usual" to largest extent compatible to having open borders in the first place, to avoid a feeling of getting steamrolled by Brussels).
Why would any particular consulate choose to have such a requirement, though? As you point out, it doesn't have much evidentiary value (and for this reason the UK, for example, have officially abolished this requirement). An answer, however, can only be speculation. Here are some possible options:
Bureaucratic inertia: that's the way we have always done it.
It might be an attempt to get applicants to self-select against applying at all if they expect to be rejected. (That is, make the cost of a frivolous application high, while keeping the fee paid by the visitors you want low. And the application fee is fixed at the EU/Schengen level anyway, so a consulate cannot just increase that if they're annoyed by hopeless applications).
The requirement might not exist at such-and-such consulate at all, but just be a persistent rumor that circulates outside the actual consular staff, through travel agents, independent visa agents, tourism promoters, embassy website maintainers, etc:
A list of "documents most successful applications include" is used as a "checklist for putting together an application" and from there morphs to "list of required documents", so at the end everyone includes it because everyone else does.
Most people who prepare such a list will generally err towards listing more kinds of documentation than fewer, because the consequences of someone being rejected ("but it said nowhere on the lists I would need such-and-such!") are much more dramatic than the consequences of everyone jumping through hoops they needn't have. We are conditioned to expect silly nonsense for bureaucracies.
(Consider especially the actual decision-makers will often only give vague and general descriptions of what is needed -- because that keeps their option of making case-by-case decisions open, that is, doing their job properly. Other people in the system, such as front-line employees at VFS or other outsourcing providers who deal directly with applicants, will be under tremendous pressure to provide something more concrete, even if they need to make it up themselves).
Due to the quite pithy rejection reasons in the Schengen system (which for some reason are prescribed by the Visa Code) it is very hard to be find concrete evidence something is not needed. Better leave it in the list just to be sure.
People who try to make a living from providing hopeful applicants with throwaway bookings have a vested interest in making everybody think they're essential to have.