What good does that do anybody?
After you do all your grinding and revisit an older area, the only thing the low-level monsters are doing is eating up your time and draining you (the player) mentally. They're not a challenge or a threat and the gold/exp they give you is basically nothing.
If you want, you can use holy water to push those guys away and save yourself a headache. It solves a quirk of the game design without handholding.
Also, I'm not sure but... you know how most dungeons in Dragon Quest are basically an endurance test? By the time you exit a dungeon your muscles are typically bulging from all the battles you've been in, but you're bloodied and beaten and your gas tank is almost empty and you might be blown over by a solid gust of wind. At this point, holy water plus your new bulging muscles
might be enough to intimidate some (not all) monsters away from messing with you as you make your way over to the inn to get cleaned up and rested.
I've occasionally said to myself in Dragon Quest "I don't know if I can make it back to town at this rate. Will holy water make a difference? Well, it can't hurt. Only one way to find out." *Use the holy water, take up the sword again, and keep slashing your way towards the light at the end of the tunnel*
I can't say if I've ever noticed the holy water getting me out of one of those situations, or if it was just good luck/bad luck that I lived/died.