The joke is that it really doesn't "do" anything. It is typically just to get Federal road money... which is... taxpayer money in the first place. So we jump through hoops to get 50 cents on the dollar back that were taken. THAT is the joke. This may not apply in every area, but it applies in the STL area. What they really should do, and it would be easier, and really for most folks cheaper and less of a headache, is to just up the price of the plate renewals based on the age of the vehicle, or the "tonnage" of CO2 output, or whatever you want to base it on.
Fortunately for us, they only require the OBD test if you drive more than 12k miles in two years (not many people know this). So my F150, that cannot ever pass the OBD test because it is a one-year-only setup (1996) and Ford doesn't make the parts necessary to fix it, never needs to be tested. Last interval I only put 8k miles on it. But I'd gladly pay $100 (instead of $50) for my two year plate if that is what they wanted to allow me to drive my "old gross polluter".