What does this do that Webpack doesn't do natively?

[STRML]

Webpack allows setting hashFunction, hashDigest, and hashDigestLength in outputOptions and also uses crypto.createHash().

It appears the difference is that this plugin uses the actual contents, not just all the ids included in the file, as webpack/lib/Chunk.js seems to say. Is that correct?

[alexindigo]

Yes, this plugin is trying to produce hash as close to the final bundle as it's possible in webpack universe.

[stephan-v]

not just all the ids included in the file.

This is exactly why this plugin is a bad idea. If you are not getting a new file served to you because your hash did not change but indices within your module have, you are getting mismatches within your manifest.js file.