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It's a bit difficult to make out from your picture but it looks like a linen closet to me, made for towels, sheets, etc .
Well, it could also be a pantry closet. Sounds like it could accommodate some grocery dry goods. Either way it's not a typical config. Maybe the previous owner used it to store their CD collection.
As far as modifying it goes it depends on what's behind it. If there is a closet behind it then you could increase the depth buy removing the back wall and re-framing it further back into the closets behind. If there are no closets behind then there's not much you can do with it to make it more useful except perhaps to remove the shelves and install wall mounted wire shoe racks in place of the shelves.