Ideally with no other traffic close by, you clear so that the aircraft intercepts the localizer below the glideslope. That way you have two distinct actions, turning on the localizer, then once on runway heading, you intercept the glideslope. Keeps it simple for the pilot. You’re not trying to do two things at once. Also it’s not necessary to target the end of the localizer cone. We can clear you closer, or further out. For each of those distances we will typically use a different clear altitude, but the goal once again is to have you intercept the localizer below the glideslope.
The other case which is the one many may not be aware of, is a parallel approach. If the aircraft are within 1-2mi of one another (a function of runway spacing), we need to maintain 1000’ vertical separation. That’s why you may hear 2000/3000/4000 AFE clears at the same intercept distance. It’s important that you follow these altitude instructions, in order to guarantee separation.
You may be told to descend to 2000’ for a clear at the end of the ILS cone at a sea level airport. Even though 3000 would work fine, please follow the instructions, and don’t decide you know better and stay at 3000. There may be another aircraft alongside you at 3000’.
One other point… the why we do this. Occasionally, someone overshoots the localizer. If that happens with parallel runways, and you don’t have vertical separation, you may end up inside another plane.