Wasn’t defragmentation more important in general on spinning media to reduce random seeks? And now most performance oriented things are happening on SSD?
Back then, we were just happy having a personal computer. I'm sure there was better tech being used somewhere. But MS-DOS / Windows was just your cheap $99 OS in an age when other compilers and OSes cost you something like $1000 to $10,000.
You formatted your hard-drive in FAT because MS-DOS used FAT. You used MS-DOS because that's what PCs and PC-clones came with. There was no alternative, and PCs were already considered a pretty luxury / nerd item. (I know people brag about their DEC Alphas, Unix copies or OS/2... but you got enough "nerd cred" back then if you simply had a PC at all)
Its just how computers worked back then. Every PC was using FAT, and every few months of regular use the disk reads/writes would get so slow that performance was unbearable.
At that point, you spent an hour defragmenting the hard drive, and everything worked great again.
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Eventually 4GB hard drives were made, and you upgraded your computer to FAT32. Soon after that, Windows promised an end to defragmenting with its next-generation NTFS filesystem (based off of the B-trees discussed in this article) and we never looked back.
I thought this mostly reduced fragmentation of the filesystem metadata; but not the fragmentation of actual datafiles themselves?
On an SSD, the random seek time is much lower. There may be some gains from sequential reads, but the gains from having data physically defragmented are not as stated as with spinning media.
You are correct that SSDs do not require defragmentation, and to a certain degree defragmentation is somewhat harmful in the sense that it forces unnecessary read/write cycles.
As for SSDs, they need some degree of garbage collection - it's considered bad for an erasable block (e.g. 1 MiB) to contain a mix of live pages and deleted pages (4 KiB each).