Why is liquid used in the tubing in bike brakes?

The deal with hydraulics as it's called is that liquids can't be compressed. So if you have a hose full of liquid and put pressure on one end of it you will get the same pressure out of the other end. With mechanically operated brakes there's always some slack caused by the levers ASO. Hydraulics gets rid of most of that and make for a good transfer of force from the brake lever to the brake caliper.