They don't need to know, they want to know. They can use a number of signals to make recommendations such as checkins, friends, hearts etc... without knowing my location every few minutes.
Eh, they sort of are paying you indirectly for your checkins.... They are paying a significant amount to a full time staff working on a free app that you use without paying them any money.
You're receiving the benefit of their work in exchange for information about which businesses you frequent, which is them paying you for that location data.
I'm pretty sure this doesn't need to be said, but everyone is allowed to take issue with things that they are not directly involved in. It's part of how society works.
Foursquare needs to know where you are to do that...