The basic problem being addressed is one of dependencies and versions, and indirectly permissions. Imagine you have an application that needs version 1 of LibFoo, but another application requires version 2. How can you use both these applications? If you install everything into /usr/lib/python2.7/site-packages (or whatever your platform’s standard location is), it’s easy to end up in a situation where you unintentionally upgrade an application that shouldn’t be upgraded.
Additionally, you may run into a problem where your distribution only offers certain versions of python and its packages, when you need newer versions. On systems like CentOS, this becomes a bit more complex as you can wind up in 'dependency hell' trying to compile everything you may need for a complex python program. virtualenv and pip make this very easy to manage and set up.
From: http://www.virtualenv.org/en/latest/index.html