It seems that if you declare a Surprise War, you get saddled with the 'traitor' badge, but I can't see any benefits to offset that?  Why would one choose Surprise War instead of regular "Declare War"?

If I was reading the UI correctly Declare War requires you to build up enough Hostility with the opposing empire to launch it, basically getting the backing of your population behind it. That can be done through border skirmishes and grievances currently.

Yes, you can only launch war once enough "War desire" has been garnered.