Drying food basically does what it says -- it takes out as much as it can of the water that's normally in the food, leaving dried matter. Because you've basically emptied out the spaces inside the food that normally hold water, the rest of the food's bulk contracts. This is why dried food appears shriveled, like a plant that you haven't watered for a while.
Removing the water from foods has a purpose other than to just make the food chewier. Water is a hospitable medium for bacteria and fungi, and if you leave moisture in the food, you provide bacteria and fungi with a nice, nutritious bed upon which they can grow. This will cause the food to spoil rather quickly and severely cuts down on the amount of time you can keep it, defeating any attempts to store the food long-term.
In addition to keeping food safe and making it last longer, the smaller size of dried foods lets you store more of it and take more food on trips. If you are really squeezed for storage space, you can store a package here and a package there, rather than having to squeeze all of the food into the refrigerator or freezer. Plus, once you've finished dehydrating and sealing the food, its quality and safety aren't dependent on a constant stream of electricity for the next couple of years. As long as the food is properly dehydrated and sealed, it's a good addition to your emergency supplies.
While soaking dehydrated food won't restore the crunch or the juiciness it had when fresh, it will make the dried food softer and bulkier. Soak the bits of food in water or add them to soup and let them sit for a few minutes. Don't rehydrate more than you need at any one time, though, as wet food will just become soggy and spoil. Cornell University research states that, if you are adding dried fruit to desserts, you can inadvertently stop dried fruit from absorbing liquid if you add sugar before the dried fruit has become tender.