Well, they offer yield for holders. That explains Ripple 😝.
In all seriousness, I think something like Kava has its place, albeit it may not be all it's hyped out to be.
I don't have a solid explanation for you, but I can tell you right now you can use the Kava app with a Trust Wallet or a Ledger, so there is at least a connection to the CEX ecosystem that way. Probably, the CEXs are aware that once people turn their CEX holdings into ETH and move to DeFi, they may not be coming back.
I think Kava is betting on DeFi not being dominated by Ethereum, and the CEX platforms are the original cross-chain liquidity protocols so-to-speak. As long as DeFi remains synonymous with Ethereum, then the CEX's will keep losing users to Ethereum DEXs. I think they are just trying to take the DeFi crown from Ethereum. Kava has a very strong team. Stronger than Ethereum – well, we shall see.