I believe the purpose was to make it your arrow. It makes it pretty, and it designates the owner, from many steps away.
I also think that, like everythig else human, having something special or flashy is a show of importance or wealth or simply being special, so the more ornate the arrow, the more you look wealthy to me.
I think that when cresting and cap dipping began, folks weren't too worried about tapering. I don't personally see my cap dipping while the arrow is in flight, but I can most certainly see the difference between 5" regular fletch and 5.5" high back fletch while in flight, especially white and red or yellow fletch.
ChuckC