As the critical level gets lower, we are increasingly willing to decrease average utility in exchange for increasing the population size. The major motivation for having a positive critical level is that it avoids the mere addition paradox (sometimes known as the "Repugnant Conclusion"):

For any possible population of at least ten billion people, all with a very high quality of life, there must be some much larger imaginable population whose existence, if other things are equal, would be better even though its members have lives that are barely worth living.
In tabular form:
Pop Avg Utility Value (c=0) Value (c=5)
A 1,000 100 100,000 95,000
B 10,000,000 0.1 1,000,000 -49,000,000
C 1,000 -4 -4,000 -9,000
D 100 -1 -100 -600


Many people have the intuition that A is preferable to B. We can see that only by having a positive critical level can we make this intuition hold.

Unfortunately, we can also see that having a positive value of c results in what Arrhenius has called the "sadistic conclusion": We prefer population C to population B, even though everyone in C is suffering and the people in B have positive lives. And if c is negative we have another sort of sadistic conclusion: We prefer C to D even though there are fewer people suffering in D and no one is better off in C than they are in D.

Some people will bite the bullet and prefer the Sadistic Conclusion to the Repugnant one. But it's hard to make a case for this being the less intuitive of the two, meaning we must have a critical level of zero.