given what happens in DDD, I can no longer really figure out what the purpose of Castle Oblivion was, at least, luring Sora in.
This works on a broader scale, really, why did the Organziation want Sora there, and why did they try to control him? What was even going on with Riku?
EVERYTHING about Caslte Oblivion was a lie. You don't lose your memories by being there, and the cards were created by the Organization... somehow. Which means CO doesn't really have any special powers to it, it's just a bunch of random Organization trickery.
We need a spin off or something, that explains what was going on here, I think. Was it Marluxia's idea to bring Sora in? Bleh, hopefully KH3 clears up some of this...

The Organization wanted to control Sora, because why have Roxas and Xion when you can have the original? It was Marluxia and the others who wanted to use Sora to gain control of the Organization. As for Riku, DiZ was testing Riku in a way to see if he could control his darkness. The reason that the Organization used CO was because Xemnas wanted them to find the Room of Awakening. CO itself isn't very special, It's the secrets that lie inside it that really make it such an important place. I am sure that once Aqua returns that anything regarding CO will be revealed.

Well actually Xemnas knew that Marluxia and Larxene acted weird so he sent them to CO along with some other suspicious members. ( Vexen, zexion and lexaeus werent traitors but their actions were kinda dangerous for xemnas ). Why CO? Because xemnas wanted namine to fck up sora's memories anyway so he would go to take a nap and, while sleeping , the restoration of the memories would affect and power up xion. But marluxia and larxene decided to use sora for her own plans. Now vexen was a semi-traitor, he used the replika to test soras strength but when marluxia gave him a challenge to eliminate sora he accepted. axel killed vexen for that reason. lexaeus wasnt a traitor, neither zexion.. he just was messing around lol. he wanted to use riku to eliminate marluxia and larxene. after the traitors were gone ( as xemnas hoped cause this was part of his plan ) zexy and lexy tried to kill riku.. just like that so they were kinda independant members so xemnas wanted them outta the way. axel killed zexion because saix told him to. zexion knew that axel was tryin to betray the org with saix.. BUT since saix is xehanortified.. that plan slowly faded away

Also: letting namine go wasnt a treasonous action, he did this so that the traitors would get pissed off ( nobodies? ) and attack sora ( hoping that they would die) now why axel attacked sora? well the org memers suffered from chronic villainy cause of xehanort anyway. im sure xehanort try to xe/fy them but he failed so he made em nobodies. Still bad memories remained. Axel in days: i remember my past, not that it has done any good to me...

i agree with carey.
It was also sanctuary for Ventus body. That way its important. Who knows, maybe it will be one of first levels in kh3

i think,C.O is the only place that Naminé can use his powers of memories.She is the one that creates the cards too...