Ok, first off.. cars with power steering still have over 2 turns of lock. This isnt a way to gear down the force required to turn the wheels, its so you wont make steering inputs too quick/large, but can still park.
Race cars do have power steering, mostly the heavier ones, like v8 supercars, DTM, FIA GT, and WRC.. to name a few.
The application in a racing game for such a large rotation would be mainly for drifting, or rally.. any place where large steering angles are needed whilst still giving great accuracy, without the sacrifice of speed sensitivity or non-linearity (both are horrible things, and both feature in GT3).