See, I came up at a time when pretty much, the only people running any kind of Unix were elite enough to know what they were doing. In college, I talked a lot of shop with friends who ran all flavors of commercial Unixes (SunOS 4 & 5, AIX, HP/UX, IRIX, the occasional OSF/1) and Linux, and for a while had root on some AIX and HP/UX boxes myself. (I couldn't afford a spare x86 box for Linux to sit beside my IIsi 'till after I graduated.) This was a time when only the truly elite ran Linux. I remember people celebrating when the kernel finally went 1.0. About your only choice for installing a system was Slackware... there were a couple of other minor distributions, but nobody I knew used them. (This was long before Red Hat.)
I came to see distributions as a means to quickly get a minimally functional system installed--kernel, networking, compilers and common language tools (perl, awk, sed, etc.) and perhaps a GUI. Everything else, you roll your own. And why wouldn't you? Actively developed software is always a few revisions past a CD. And why install packages you're not going to use?
I suppose it was inevitable, distributions sprung up to serve more complex needs... friendlier GUI desktops, simpler installation and administration, binary package management, security, embedded applications, and more. Distributions sprung up around other kernels, mainly the BSD variants. Still, each one fills a set of needs, from technical and usability perspectives. And everyone's needs vary.
BTW, if anyone's considering offering a "correction" that the name "Linux" should be prefixed by "GNU/", you need to join RMS in fucking yourself.