edit: Okay, title is hyperbolic. Not "literally." Close, though.
There isn't some hidden mechanic or some secret we haven't figured out. Earlier on in development they intended the game to be much darker. They made it dark, they added sconces for you to ignite, and they even modified the equipment UI to include that torch timer. But it's all useless, because they -- for some reason -- decided to brighten everything up. A huge bummer for a number of reasons, the big two reasons being that it would make much of the lighting in the game way... way better, and it would change a lot of the way you play the game. The consoles could handle the lighting very well, as is demonstrated in a few spots throughout the game (and as with past Souls games, the real culprit in bad framerates is areas with too much geometry; has nothing to do with lights for the most part).
As it is now, the torches are entirely superfluous; a holdover from an earlier game build.
My thinking is they merely left it in because they'll be releasing the PC version as-originally-intended, dark and full of pretty lighting and useful torches.
Anyways, how do you feel about there being an entire, ever-present mechanic in the game that has absolutely no utility? (Okay, except for that one bonus thing you can do with the windmill... but that hardly excuses it).