In all current versions (this includes beta), sponges do absolutely nothing. They were used in the classic (old classic, not new one) as a way to unflood places, as they created an area about 2 to 3 blocks around it that had no water. This was useful in the classic, because the water was inf. As inf. water was removed since, the use of sponges has, and so has the ability to get sponged legit. But, as the blook of the "sponge" was not actually removed, just the way to get it legit, you can still get it with inv. hacks.
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