The point is that the size of a word means something. A large word is typically intended to indicate, "Here is something that his person is talking about, that a lot of other people are also talking about. Click here to see what others have to say."
> Can someone explain why these became popular?
I suppose this happened, in part, because they seemed to have some reasonable-sounding theory behind them (see above).
The cool factor was probably more important, though. UI trends often ignore usability issues, after all, and tag clouds are an automatically generated example of the kind of "messy" art that became popular a decade or two ago.
So yes, I've clicked on them. But not very often. But certainly "look at" more than I actually "click on", so there is still some value in these to some degree even if people don't click on them.
My opinion is that tag clouds are better served as art than as functional UI elements...
I don't think I've ever used one to navigate.