The goblin dungeon is mainly used for quests. During the Dwarf Cannon quest, you rescue a dwarf child from the goblins, then in the One Small Favour quest, you battle a Slagilith. Unless you wish to kill goblins, there is not much of a use for this dungeon.

Dungeon Rat (Level 12) Giant Bat (Level 27) Goblins (Level 2, 5, 13) Slagilith (Level 92)