I am the only psycho I've heard of so far, who sets mine faster, 60:1. My reasons are for realism. I want not only the size of the world to seem realistic, but the accomplishments of my character. Even with my real hunger and sleep mods and conservative use of fast travel, I could practically get my characters to head of all guilds in two weeks (game) time, in addition to crafting 1000s of potions, repairing 100 suits of armor, etc. That breaks immersion more than the day and night cycle for my RPs.
The faster cycle accounts for all those invisible activities that, while I don't want to role play like some people (meal times, smithing times, etc.), but I want the time accounted for. Granted, some distances are out of proportion (a character worshiping at the altars in the Temple may take two hours) but for role play purposes, I like that my character is spending that much time in a location, without me having to spend that time as well. I find 60:1 balances out in the long run - over two characters so far.
My current character is a vampire with a need to sleep about 9 hrs a day (modded). I will probably drop his sleep requirement once he becomes Madgod, but right now, in addition to questing, I enjoy managing his time resources and his need to feed, an extra layer of survival that has given me inspiration and new directions in RPing.
I could go on, but...
tl;dr: different strokes for different folks!