Actually, A44, England does not “own” them. Iceland is British territory, but it’s not part of England (as in the same territory.)
The reason for Iceland and Greenland, IMHO, is as a bomber base for long range SBR bombers. (Notice how they are 4 territories from E. USA.)
Theoretically, if Japan owned Hawaii, you could also bomb W. USA from there or land bombers after bombing W. USA or E. USA there.
Of course, I hardly see many opportunities for this.
And one could imagine the day Iceland is used as a staging ground for allied fighters to liberate England one day, seeings as they share a sea zone it would be plausible you could use it to attack England…