PCB milling has advantages for both prototyping and some special PCB designs. Probably the biggest benefit is that one doesn't have to use chemicals to produce PCBs.
When creating a prototype, outsourcing a board takes time. Alternative is to make a PCB in-house. Using the wet process, in-house production presents problems with chemicals and disposing thereof. High-resolution boards using the wet process are hard to achieve and still, when done, one still has to drill and eventually cut out the PCB from the base material.
CNC machine prototyping can provide a fast-turnaround board production process without the need for wet processing.
If a CNC machine is already used for drilling, this single machine could carry out both parts of the process, drilling and milling. A CNC machine is used to process drilling, milling and cutting.
Many boards that are simple for milling would be very difficult to process by wet etching and manual drilling afterward in a laboratory environment without using top of the line systems that usually cost multiple times more than CNC milling machines.
In mass production, milling is unlikely to replace etching although the use of CNC is already standard practice for drilling the boards.