There are actually 2 answers to this that I can think of...

1) Track ends are probably the most traditional way to put a wheel on the rear of a bike with a chain. bikes have used this techique since at least the 1910s-20s. Derailleurs required a different interface and thus the vertical drop.

2) Track ends allow say a 14t and a 18t to be used by the rider without adding or removing links from the chain. Vertical drops this is not possible.