QUOTE(Wikipedia)
Purpose
The zero fret is primarily used to reduce production costs. The zero fret was commonly (but not exclusively) associated with cheaper instruments, since the cost of the labor involved in making a nut with slots carefully filed to the correct height is greater than the labor required to install a zero fret.
The zero fret is primarily used to reduce production costs. The zero fret was commonly (but not exclusively) associated with cheaper instruments, since the cost of the labor involved in making a nut with slots carefully filed to the correct height is greater than the labor required to install a zero fret.
This is not true. No less than Chet Atkins himself had a zero fret on some of his signature guitars. Take a look at this Gretsch 6120 that Pete Townshend used.
It's been pointed out several times on the talk page that the statement is inaccurate, but in years nothing has been done about it.