Before iCloud Photo Library and Photos.app in OS X 10.10.3, we had iCloud PhotoStream. iCloud PhotoStream synced its photos to the ~/Library/Application Support/iLifeAssetManagement folder (and subfolders). Even though PhotoStream only synced 1000 photos, that folder could get rather large, but you had to live with it.
Now that iCloud Photo Library exists, and everything is stored in the cloud (and the cloud copy is "the truth"), I'm assuming that the iLifeAssetManagement folder is no longer used and can be deleted. Does any one know for sure if that's true?
In my case, the folder hasn't had changes since I upgraded to iCloud Photo Library, which would indicate it's not being used.
Best Answer
The answer appears to be "Yes, it can". After a month of the folder not being touched I finally deleted it and it hasn't caused any issue whatsoever. However, if any device using your iCloud account is still using Photo Stream (for whatever reason), you may still need the folder.