Butterflying a hot dog (or any similar sausage) has two effects. First, as the moisture inside the hot dog expands during cooking, causing the casings to frequently burst due to the pressure that builds up. When you butterfly a hot dog the this is prevented. Such blistering does not 'harm' the hot dog but are somewhat 'unsightly', so I would call this an aesthetic effect. The second effect is that it allows the hot dog to cook through more evenly. Particularly for those who prefer their hot dog well done butterflying can get the insides cook through without charring the outside.
[Edit: found something interesting to add...]
If you want to impress your friend with something different, try spiral cutting your hot dog.