It is decorative, but effectively a form of identification. Different fishing communities had their own distinctive patterns. A reason for this that I heard/read was that it made identification of drowned fishermen easier. Like most folk crafts, knitting of fishermen's "Gansies" a corruption of Guernsey (rather like jersey is derived from the island) has pretty much died out in most former fishing villages and communities. Fair Isle (between the Orkneys and Shetland) seems to have had a pattern that became popular and fashionable, whilst the other traditional patterns rather faded away.