It's an indicator for overall health, and more specifically for health during childhood. When indicators for health go down it's important to study them. A child who is taller is not necessarily better than one who is shorter, but a child who didn't catch a serious growth-stunting disease is
definitely better off than if they had, assuming the disease had other effects.
Back when polio was common you could tell what areas had been hit the hardest and in which year by looking at average height in school photos. My grandfather had oddly short legs but a long torso because of a very mild bout of polio as a child. This is important not because he was shorter than he might have been, but because more serious cases of polio can cause paralysis, permanently malformed legs, and death. Height in this case is a proxy for worse things.
Height discrimination may actually be due to its usefulness as a proxy for genetic damage and disease load during mate selection. The same thing that causes people to unfairly discriminate makes it useful for studying population changes.