One of the reasons is size and portability. Leica and other rangefinder cameras are a good bit smaller and lighter than their SLR/DSLR counterparts. That is what made them very popular with photographers who did a lot of street photography. They are also very quiet and unobtrusive, another plus. Leica's lenses are exceptional, no one will dispute that.
But alas. some of it also had to do with "snob appeal". If you were somebody, or at least THOUGHT you were during the '70's and '80's, if you had a Leica hanging around your neck, people were supposedly going to be impressed. I, unfortunately for them, was never one of them. If you want to impress me, show me the photos you took with that Leica, I could care less what equipment you have hanging around your neck. I could most likely take better photos with an old Yashica Electro 35 rangefinder than you could with your Leica that cost 10 times as much. But I digress
I am with you though. If I had ten grand to spend on camera equipment, a Leica M9 would never even make the list.