It's from Buildcraft. I haven't quite figured out what exactly the point is, but I have heard talks that it is supposed to be an endless water source for a pump. As in, it goes all the way down to bedrock, and the final bottom-most sourceblock constantly refreshes itself. Place a pump over the hole, and it will be able to pump water forever with no worry about lag preventing sourceblocks from reforming in a pool or similar things.
That said, I only saw this being discussed. I have not tried it out.