The DOS Environment Space is used to store global variables which all applications can access. The registry performs the same function. However, instead of allowing only a few Kb for variables, the registry is over 2 Mb.
Many programs assign DOS Environment Space values via set commands in autoexec.bat. In addition, autoexec.bat and config.sys specify which programs to run when the system boots. The registry replaces both these files.
ini files normally store configuration parameters which are used by a single application. system.ini and win.ini are 2 exceptions which store operating system and other global variables. Most of this information is now in the registry.
Thus, if you want to customize your system, you need to edit the registry. This is no harder than modifying autoexec.bat or any of the other ascii configuration files.
Note: Just like an error in autoexec.bat, config.sys, or a configuration file could make your system unusable, an error in the registry can make your system unusable.