SANs give you a lot of functionality that you don’t get using using local storage.
First you get better utilization of storage capacity. If a server needs 100 Gigs of space using local storage you probably have to give it 400 Gigs or more of space. When using a SAN you simply carve out the 100 Gigs that the server needs and present it.
You also get better performance on the disks as the disks in the storage array will typically be faster than local disks.
With storage arrays you can also do things like take spanshots for point it time copies of the data which you can then mount to another server to do backups without having to strain the production server.