Why is my homedir wide open?
Why does the default mode of adduser is to create a home directory that is wide open for anyone to change into?
I'm curious how that decision was made.
I'm curious how that decision was made.
As for why it's still like that, it's just never been worth the cost of changing it. Since we now have forty years' worth of shell scripts etc. built on those semantics it would be pretty much impossible to change the default now. On a modern graphical linux most users aside from old unix diehards will use the system's UI with its own interface, so it's unlikely to cause problems for many people.
(To answer your literal question about "how the decision was made", most likely Kerrigan or Ritchie thought about it for a couple of seconds and then coded it that way. That's how most of unix's "design decisions" happened)
This behavior is useful on subdirs, too; for example, a shell account I used in the past had http://server.example.com/~username/ mapped to /home/username/public_html, and since the webserver ran under a user that didn't have root permissions, making /home/username a+x allowed the webserver user to access the files that I wanted to share over the web (assuming I had public_html chmodded properly, of course).
So it's less about cd and more about direct file and/or directory access for purposes of widely-accessible files.