TXT file rendering as PNG

I ran across a site at work the other day that one of the designers used a .TXT file as the background image and it actually rendered out. If I tried to view the background it told me to download it, so I did and it's all in gibberish.

how does this work?
why does this work?
is this a horrible thing to do?
is there a reason to ever do it?

All the main questions that come along with it.

I tried to Google it but I keep coming up with converting Text to PNG, PDF, etc spam crap-ware.

Any help or information would be appreciate.

Thanks!!