Apple did something similar a while back. Their feature is called Activation Lock, which comes with iOS 7. In San Francisco is cut down on phone theft by 40%, and in New York City is got cut down by 25%. The new Android update will surely have the same outcome for anyone who uses Android Lollipop. And even if you don't, a thief is going to be less excited about stealing your phone just because they will probably assume there is no point. It makes stealing smartphones not worth the risk.
The 5.1 update is also supposed to improve Lollipop's overall stability. It is the biggest operating system Google has ever launched for a smartphone, so it was bound to have some kinks that needed to be worked out. It appears they are doing a good job at it!