I remember seeing in some old family photos split ear headstalls made from old leather belts. (The barrel racers using bling belts for headstalls is not a new idea..LOL!) A lot of cowboys made their own gear out of necessity and lack of money. I would guess the split ear came from simplicity.
There are versions of cowboy headstalls like the military one tiny posted and sure they are handy but I don't think every cowboy could afford them for everyday use. I think that headstall styles with cowboys is regional like saddle styles and cattle handling methods.
I DON'T LEAD 'EM AND FEED 'EM, I RIDE 'EM AND SLIDE 'EM.