Your simplification of (x^n)^(1/n) to x is correct for x>0, but it is wrong or problematic for x<0, or for complex x. See what happens for x=-2, n=2:
With[{x=-2, n=2}, {(x^n)^(1/n), x}]
Mathematica refuses to make the simplification unless the user explicitly assumes that x is positive. PowerExpand instructs to ignore all those scruples.
You are of course right Gianluca. PowerExpand acts here like a quick and easy solution for everyday use. When the variables are real and positive numbers.
Given the right assumptions Simplify will also give the expected result:
In[1]:= Simplify[(x^n)^(1/n), Assumptions -> {x \[Element] Reals, x > 0, n \[Element] Reals}]
Out[1]= x