Scene modes are particularly important on small cameras. In fact high end DSLRs do not have any scene modes because they give complete control over the camera.

Scene modes basically abstract the underlying controls which are not reachable on a camera like the one you show. Notice there is no M, A, S or P mode on the camera, so you have no control on any of the exposure parameter save for ISO which is usually selectable in the menu system.

The camera itself has a certain range of ISO, Shutter-Speed, Aperture, Focus-Distance and White-Balance which Scene modes set. Most compact cameras for example will use a limited shutter-speed range, say 1/1600-1/8s in Auto mode but will take longer exposures when shooting in Night, Fireworks or Starry-Sky modes. When using portrait mode, a wider aperture will be chosen, when shooting snow or beach in the right mode, exposure and color will be adjusted accordingly. A Macro scene mode tells the camera to focus closer while it may normally only attempt to focus further in an effort to speed AF. These are just some examples but there are cameras with over 20 scene modes that set parameters in ways that the user cannot otherwise.