I had always assumed that protein powder was derived from waste products that were created during other food processing. Why would someone use protein powder when there are other good sources of protein?
Times have definitely changed. Whey is in everywhere, even in oreos. Demand got out of control cerca 2012, which led to all the spiking.
One of the major instant shockwaves to the market was the launch of Gatorade Recovery drinks. And that was on top of the general movement towards high-protein diets (a good thing). Took the market quite a while to recover from that, pardon the pun.
Regarding your question... if you have a high-protein diet, it's a nice convenience to throw a scoop or two in. You ever try to get 225-250g protein per day without using shakes, day in and day out? Gets tiring.