Settlers are allowed for Open Play, so that you can create cities (bases) wherever you might need them -- to secure resources, to add population, to expand borders, as a base for air attacks, as a naval base, as early-warning for better defense, etc. You can certainly question the AI's priorities in building them (e.g., why be building a settler when someone else's army is chewing up your other poorly-defended cities?), but the fact that there are settlers in Open Play adds a useful element to the gameplay.