Personally speaking, I don't fully understand the necessity for a 'close thread' option either.
I either see a contentious post as the following....
a) I warn the offenders they're skating in thin ice (my favourite stance)
b) I'd delete the offending comments (yep, often done too)
c) remove the thread entirely- I'm not overly keen on this and will only do it occasionally, It usually happens when the 'orrible comments are too far/ spread throughout the thread and my pointy finger gets knackered.
I've not used the 'close thread' option, and I personally can't see me doing so in the future, the above 3 options seem to work by and large.
This obviously is my own personal view, and until another Mod or the Ed holds their hands up and tells you why they do it, I guess we'll just have to try to abide by the rules and regs and hope that our threads dont go that way.