So its pretty much exactly what I figured they were using the edram for, frame buffers, and as some of you may know, they are a huge bandwidth hog. This essentially means that the pipeline to the main memory is nearly one way, and has the 12.8GB/s bandwidth for read only. This makes the latency of the ram more important, because bandwidth is not such an issue with the main memory, the edram is alleviating a ton of the burden thanks to doing the frame buffers there.
Thank goodness for Shin'en, they have been willing to speak out on the Wii U, and how things actually work with the console. Some people will want to dismiss these guys because they are a small developer, but they are basically 5 guys who are as talented as anyone in the industry. On a technical level, they are very very good.