I'm still trying to get my arms around what is the predominant use of the Raspberry Pi.
The very abbreviated history of the Pi is:
Eben Upton, Raspberry Pi founder, was an undergraduate admissions officer for the CS dept. of Cambridge University.
He noticed that applications to under grad CS courses were in decline, and worse still those kids arrived at university not knowing how to program like they did in prior decades.
He surmised that it was because these new generations did not grow up with computers in their bedrooms they could play with, hack with, destroy at will. Unlike those that had C64's, Sinclair Spectrums, TRS-80's, Amigas etc back in the 1980's/90's.
He set out to fix this by creating a very cheap and small computer that kids could get as a toy, and do what they will with.
Eben then took a job at Broadcom where he found it possible to use their ARM processors and GPU's to build what he wanted.
Thus the Pi was born.
Of course people have imaginations, they could see all kind of things to do with such a small cheap computer with excellent Linux support. Thus demand was huge from day 1 and has grown many fold since then.
Certainly GPIO makes a lot of things possible that are hard/impossible to do with a PC/tablet/phone. Certainly such a machine is useful for traditional embedded systems things, whilst others try to use it as a PC replacement.
A better alternate than giving your kids dolls and toy guns as tools to prepare for the future.
Although I suspect that dolls and guns are not so much a concern today as kids getting phone and tablets and the like, thus getting immersed in games and social media whilst never seeing the device as a thing they could program. You know, a computer.