Their intent was so that there would be someone else to utilize diplomacy with... however, it was apparently to hard to balance, so diplomacy with Minors was completely removed...
So yeah... they serve little purpose. It porbably makes more sense to add a major faction, but at a lower AI intelligence to represent "minor" factions.
Notably, my mod GRM does get some Minors to expand, by virtue of gifting some of them a Colony Ship at game start. Which does make them a tiny bit more interesting.