They're good for strengthening stone walls once you can make stone. We've got a base in the plains which has been attacked a few times by lox which do enormous damage. We added the cage walls after building our stone walls and though the lox smashed the stone completely, the cage walls remained.

ah nice. yeah i have tamed Loxes and moved to my main base. Right now they are housed in wooden structures and was thinking about putting them in Iron cages.

They are stronger than stone but there is no way I would grind even more iron just for that.

Originally posted by FTZ35:

They are stronger than stone but there is no way I would grind even more iron just for that.

This. I recovered about a stack and a half of iron with the new chests, though, so maybe you can splurge now if you have a weak spot.
I am still a fan of raised terrain outer walls.

I'm going to guess they're stronger, as the iron door is way stronger than the wood ones. But the idea that I'd make anything remotely like an outer palisade out of them - no chance in hell.