I don't think I have ever seen a wall like that.....interesting. I am not sure what the builder was thinking.

I don't know if I would invest much money into making the cubbies useful. I would probably drywall over it, or if you don't want to sacrifice the space, at least remove the grids (so it would be one giant opening).

I agree with CLC. Take away the grid and leave it as one big niche. then put in an entertainment console or such.

if that's not possible for some reason, turn the uppers into 3 shelves ea, etc like a bookcase maybe.
Or a place to put framed stand up pictures of the family.

Bookcase the bottom.