Most of the people I see wearing arm bands is to prevent their arm from rubbing the guitar body.
But, the true intention of arm bands I've always thought was NOT to keep sweat from your hands or arms, but to have a way to wick sweat away from your eyes, face, head, etc. at arms length (no pun intended). In sports arenas, where these things originated, you'd see athletes using them to wipe sweat off their heads and faces with a quick sweep of their wrist...This is what we always did in high school sports. Only nowadays have you seen them used so often in metal or by musicians.