I'm not positive what started the trend but my geuss is that it has to do with weighing the tail down so that the horse carries it "properly" for the show ring. There are rules on how much a tail can weigh although, I've never seen anyone check a tail before. I've seen them drug test routinely and I've seen them check bits at every show but I'm not sure I've seen them look at a tail. There are specific rules on how they can be attached and what they can weigh.
In my area they didn't start appearing until appaloosas got stockier (they're mostly racers out here) and started appearing more often in the western shows. I do mean the true and through rat-tail appaloosas out there. It's nearly impossible to find a true app with a long, or at least naturally thick tail. I grew up next to a serious breeder and live next to another serious breeder and except for one stud that has a lot of QH in his bloodline all of the apps I've seen from yearling to 25 are rat tailed. Where I'm re-locating my horse for boarding the BO specializes in app show horses and while hers are long tailed they're very sparse and thin. I believe the fake tails started out so that people could have a fuller tail with a natural or flat bottom and look good. They're mostly very lightly used from what I've seen, though, and put in as 'pieces' to get a natural flow.
The only 'heavy' fake tails I've ever seen in person were on saddlebreds and morgans at a national show held at my states fair grounds. The horses were docked to about 2.3 - 4 inches and they had whispy tails that dragged the ground placed on them, I think they were glued because there was a lot of 'old' glue on the horses tails ( I viewed over 60 horses getting prepared for show and another 80 being undone.) and out of all the horses I saw in the 'back stage process' only 10 of them had natural tails and they didn't make it to the ground while all the fakes were 'whispy' dragging along about 2-3 feet behind them. This was a huntseat competition and driving (which I didn't see the point of those tails if they had to be pinned up to avoid getting caught in the cart) all the AQHA, APHA, PhCA and other stock horse shows I've witness the tails were natural or very light weight fakes and only used to 'complete' a ratty tail.
I don't see a problem with fake tails personally. I actually plan on buying orange and white colored extensions for my horse to use in small-time shows. I don't see it as a big deal. If person A wants their horse to have a full tail let them. It does not
affect the judges scores. I've seen rat tailed horses beat out a full tailed horse in a class. All it does is complete the clean, trimmed, and well-kept appearance of a show horse.
Personally the only thing I'd add to my filly is colored extensions because I'm a serious 'colors!' person and if I'm wearing colored extensions (mostly clip in ROFL ) why can't my horse match me? It doesn't hurt them and as far as I can tell it just annoys or pleases people.