Detect file encoding

I need helping deciding whether the following is a useful tip:
http://vim.wikia.com/wiki/Bash_file_encoding_alias

The heart of the matter is that the tip claims it can use Vim
(on Linux) as a quick way to determine the file encoding of a
particular file. It uses this bash alias (one line):

alias vimenc='vim -c '\''let $enc = &fileencoding | execute "!echo Encoding: $enc" | q'\'''

A usage example is as follows (at bash prompt):

$ vimenc UTF-16.xml
Encoding: utf-16le
Press ENTER or type command to continue

I don't understand this. Surely all Vim does is look through
whatever 'fileencodings' you have configured, and take the first
which gives no character encoding errors?

If my understanding is correct, wouldn't the tip require the
user to have made a decision in advance regarding what the user
wants to regard as the "correct" encoding? Since the tip does
not mention 'fileencodings', is the tip worth keeping?

While there are no certain ways to detect file encodings, surely
Linux has some more standard tool?

John

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