Do you remember this?
Or more specifically this bit?
Well I now have an explanation of what this dangly add-on to pin cushions is all about! This information comes from Chelle, who refused to leave Stitch In Time in Marrieatta until the truth was known!
Apparently once upon a time, many years ago, sewers used to coat their thread with wax. The needles would get all gunky from the wax, so the little dangly bit on the pin cushion used to be used to wipe off all the gunk by sticking the needle into it.
Back in those days the dangly bit used to be filled with scraps of embroidery thread and it did its job very well. Nowadays the dangly bits are typically filled with sand, and this is very bad for your needle/// the sand apparently will damage the needle, leaving little barbs due to the abrasive qualities of the sand, and these barbs will tear at your fabric as you sew.