Knives are amongst the first primitive tools known, and have since been made from every material from flint and obsidian to high-test titanium and advanced composite plastics.
In Wasteland, the knives you find don't seem to be of the Boy Scout or Swiss Army variety, since the game isn't programmed to let you fix anything with them. There doesn't seem to be any distinction between a good kitchen-grade steak knife and a US Marine-issue K-Bar. All knives are designed to allow the user to apply pressure along a narrow edge or point, which multiplies force and allows one to puncture and shear targets. Knives are everywhere, and always have been: it is nearly impossible to deprive even the most oppressed culture of simple tools that can be used as weapons. As a result, knife fighting comprises an ancient and respectable family of combat forms known around the world.
Your Desert Ranger Private fresh out of Ranger Center might want to equip his Knife if he or she is trained in Knife fight and has a nice modicum of Strength, Luck, Dexterity, and Agility. With a high enough value in all the previous, along with a healthy dose of Brawling skill, it is very possible for a character to take on hardcore enemies with knives and beat them soundly. However, in such endeavors, it's usually faster still to just give the character a Proton ax and watch the carnage.