Mind that direct manipulation of bitmap images and the mouse were new to consumers. (That is, there had been the Xerox Star and the PERQ, but these were no systems for the mere mortal.) Lisa did have a mouse, but no square pixels and came with a drawing program, which was essentially about placing layered shapes. So, what was revealed by the use of the eraser was that this was actually manipulating a composition on a digital canvas, on a per pixel basis, under manual control. (Just like the fat pixels / pencil demo and the option+feature drag demo at the very end, which enjoyed a similar reaction.)
I guess, that this became more obvious by eating the image away, rather than by adding strokes or shapes, is because the latter could have been accomplished by other means, as well, like in a drawing program. The eraser, however, gave it away, unambiguously.
I was a participant at a mathematics summer school at the local atomic research centre in Sydney in 1980. The focus was on mathematical modelling and using computers to realise those models. (The theme was looking at predicting fuel demand especially oil). It was great fun learning to program FORTRAN on a mainframe, BASIC on a minicomputer and see other computers including an analog computer in actual use. One really striking display was them showing a light-pen input with a vector graphic display. I distinctly recall how out-of-the-future it seemed when the demonstrator used the rubber banding effect of drawing shapes by stretching their dimensions, and then selecting tools from a palette on the edge with the pen and manipulating the diagram he was building. It certainly seemed mind-blowing to this 17 year old at the time.
I guess, that this became more obvious by eating the image away, rather than by adding strokes or shapes, is because the latter could have been accomplished by other means, as well, like in a drawing program. The eraser, however, gave it away, unambiguously.