Its arms and legs are weak, but when it rolls its ears up tight and then unleashes them with its full force, it can smash boulders to dust.
The reason it keeps one ear rolled up is so it can launch a swift counterattack if it's attacked by an enemy.
My hypothesis as to why Buneary rolls up its ears is that its hearing is far too keen. I surmise that the Pokémon protects its hearing by limiting the sound that may enter its ears.