The Auto Shrink feature of SQL Server is designed to limit once precious storage space required by databases. Since most modern systems tend to expand continuously and may go as far as marking records deleted rather than actually deleting them, there is little benefit to this feature anymore. Furthermore, with the price of a terabyte of data plunging, there is little economic value to saving the space.
Turning Auto Shrink off prevents indexes and file structures from getting fragmented and may prevent serious performance problems if you are using a lot of temp tables or transitional data structures.
