Versions and Time Machine seem to me to offer duplicated features: both do hourly backups, and their interfaces for browsing previous versions of files are very similar. The only difference I can see is that Time Machine backs up all files regardless of whether their associated applications support the TM interface, so even if the app I use to view the file doesn't work in TM, I still have backups of my files - whereas Versions has to be supported directly by each application.
I can understand having Versions' file and document versioning support there under the hood in order to enable multiple applications to open a single file without causing corruption - but why present this versioning system to the user when we already have Time Machine with the same features and a near-identical user interface? Why use more disk space to provide the same feature twice?
Is there a crucial feature or use case for either Versions or Time Machine which means it makes sense to have both?