But it had to solve some original problem (while maybe introducing others). Otherwise it wouldn't be used?
From user's POV, I've always preferred IS installers than Wise, but I haven't created any packages even once. I was always just the "next-next-finish"-type of user ;)
A cut down (but still very functional) version of Install Shield came bundled with Visual Studio, Delphi, C++ Builder and perhaps others (they were somewhat customized versions for each) so for many it was available out of the box.
And the included version had a wizard to quickly create an installation project so unless you wanted something advanced, making an installer was a matter of selecting your program's files, the name of any Start menu shortcuts (and perhaps a couple of other things i forget) and then building the installer. For a ton of people it was more than enough.
I think at the time its main "drawback" was that it made installer downloads from the internet a bit awkward since it generated tons of files, but many archiving tools (WinZip, WinRAR, etc) added options for making self-extracting archives that can launch applications, so the combo of a WinZip self-extracting archive that launches an InstallShield setup.exe was very common for a very long time.
But basically the reason it was used a lot was that it was easily available to the users of the most popular development tools at the time.
It made you a standard executable Windows installer. Inexplicably there wasn't a decent first-party Microsoft solution to this until the Microsoft Store era.
There wasn't really effective competition, probably because it's hard to get people to pay for developer tools and it's a hard problem to do well.
From user's POV, I've always preferred IS installers than Wise, but I haven't created any packages even once. I was always just the "next-next-finish"-type of user ;)