Table pages get fragmented, so the deleted space is not re-used 100% as expected, more near 50% in MySQL. So the table still grows to about twice the size you might expect for your amount of data. The index gets fragmented and becomes lob sided: It contains your new data but also the structure for your old data. It depends on the structure of your data on how bad this gets. This situation however stabilizes at a certain performance. This performance point has 2 benefits:
1) The table is more limited in size, so potential full table scans are faster
2) Your performance is predictable.
Due to the fragmentation however this performance point is not equal to about twice your data amount, it tends to be a bit worse (benchmark it to see yourself). The benefit of the delete scenario is however since you have a smaller data set, that you might be able to rebuild your index once every reasonable period, thus improving your performance.