Answering shortly: to increase exp/h.
Diamond arrows damage an area of 21 fields centred on the target (2 fields of radius), just like old Fireball Rune (before update in 2007). Since target will always be within the damage area, you will hit it even when you miss it.
While using rod or wand ED or MS may hit additional damage caused by charm only to one monster (rune area + single target), then using bow/icicle bow you can use diamond arrows which deals area damage and trigger additional damage caused by charm on a big area of 21 fields (rune area + diamond arrow area). As a result you deal visible higher damage, than with rod (even if your magic level is lower).
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