On single speeds and internal gear hub bikes this was done to adjust chain tension. The practice carried over to derailleur-equipped bikes: many early derailleurs clamp on to the dropouts. Slowly they moved off of the dropout onto their own bolt hole eliminating the need for horizontal dropouts. (70's 10-speeds are used a lot for single speed and fixie conversions because they have the dropouts and they're plentiful.) This didn't completely disappear until the late 90's or so on LBS bikes.