IMO notebooks are hugely overused and don't have any place in the development of software.

But they're fantastic for what they were designed for -- which is quite literally "notebooks". AFAIK the idea was first popularized by Mathematica, and I still reach for that when I have some highly iterative, undefined math/data problem to sketch on. IMO the real issue is that Python is used both for this purpose and for software development, which leads to people using notebooks inappropriately.