It was also popular in the 80s, 70s, 60s, and yes, the 50s. Everything old is new. The real question is, "Why did people switch to single stage amps in the 1990s and 2000s?" The answer is that a bunch of chips appeared on the market around that time which could do everything.
The O2 has been surpassed by many great designs, but the O2 really did start that arms race.