Basically because of the slow pace of review and publication the letters column became a way to talk about recent results or problems, and then follow up letters (i.e. comments on the blog posts) became common. So the editors decided to hive it off and speed up its publication schedule.
The term peer review was virtually non-existent prior to the 1960s. And despite that, nearly everything in modern society can ultimately be attributed to breakthroughs that happened prior to the advent of peer-review.
https://books.google.com/ngrams/graph?content=peer+review&ye...
It does correlate perfectly with when modern scholars point to when the institutions were captured.
Arxiv is vital for quickly developing research fields.